The City of Ames uses the consumption method to report its inventory of supplies on its general fund balance sheet.What account is debited in the general fund when Ames acquires supplies?
A)Expenditures
B)Inventory of Supplies
C)Supplies Expense
D)Fund Balance-Nonspendable

Question

Quizplus · Accepted Answer

When using the consumption method for reporting inventory of supplies in the general fund, the acquisition of supplies is recorded as an expenditure. This method recognizes the cost of supplies as an expense when they are consumed, not when they are purchased.

The City of Ames Uses the Consumption Method to Report