A general fund uses the consumption method to record inventories. Beginninginventories are $10,000, purchases are $600,000, and ending inventories are $12,000.The general fund records an end-of-year adjusting entry that:Select one:A. Debits nonspendable fund balance by $2,000B. Credits nonspendable fund balance by $12,000C. Debits unassigned fund balance by $2,000D. Debits nonspendable fund balance by $12,000At the beginning of the year, a special revenue fund purchases equipment for $400,000in cash. The equipment has a 5-year life, straight-line. The fund still holds theequipment at year-end.How is this equipment reported in the special revenue fund's operating statement forthe year?Select one:A. Expense, $80,000.B. Expenditure, $400,000.C. Other financing use, $400,000.D. Not reported on the operating statement.

The consumption method refers to the type of inventory method under which the purchases transactions…

general fund uses the consumption method to record invento ventories are $10,000, purchases are $600,000, and ending in e general fund records an end-of-year adjusting entry that: lect one: Debits nonspendable fund balance by $2,000

general fund uses the consumption method to record invento ventories are $10,000, purchases are $600,000, and ending in e general fund records an end-of-year adjusting entry that: lect one: Debits nonspendable fund balance by $2,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Budgeted Income Statement

Accounting is the process of recording business-related financial transactions. The process of accounting involves summarizing and analyzing the transactions. The financial statements which are prepared in accounting contain a summary of the various transactions that took place within a certain accounting period. Book-keeping or accounting is one of the most important activities of any business.

Question

A general fund uses the consumption method to record inventories. Beginning
inventories are $10,000, purchases are $600,000, and ending inventories are $12,000.
The general fund records an end-of-year adjusting entry that:
Select one:
A. Debits nonspendable fund balance by $2,000
B. Credits nonspendable fund balance by $12,000
C. Debits unassigned fund balance by $2,000
D. Debits nonspendable fund balance by $12,000
At the beginning of the year, a special revenue fund purchases equipment for $400,000
in cash. The equipment has a 5-year life, straight-line. The fund still holds the
equipment at year-end.
How is this equipment reported in the special revenue fund's operating statement for
the year?
Select one:
A. Expense, $80,000.
B. Expenditure, $400,000.
C. Other financing use, $400,000.
D. Not reported on the operating statement.

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