Campbell County Uses the Consumption Method to Record All Inventories

question 32

Multiple Choice

Campbell County uses the consumption method to record all inventories and prepayments.The County has a 9/30 fiscal year-end.On April 1, 2015, the county purchased a two-year insurance policy at a total cost of $400,000, paying for the policy out of the general fund.In the fund financial statements, the amount of insurance expenditures for the fiscal year ended 9/30/15 would be

• A)$400,000.
• B)$300,000.
• C)$200,000.
• D)$100,000.

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Definitions:

Economic Function

The role or purpose that an economic activity serves in the broader economy, contributing to overall economic performance.

Profits and Losses

Financial gains achieved when revenue exceeds expenses, or deficits incurred when expenses outstrip revenue.

Real Assets

Physical or tangible assets that have intrinsic value, such as real estate, commodities, or natural resources.

Coincidence of Wants

A situation in barter economies where two parties each possess an item the other wants, allowing for a direct exchange without the need for a medium of exchange like money.