Assume That the Village of Hannah Uses the Purchases Method

question 44

Multiple Choice

Assume that the Village of Hannah uses the purchases method of inventory accounting. At the end of the year, the inventory levels have increased. What entry would be made to reflect the inventory increase?

• A) Debit Expenditures, Credit Inventory of Supplies.
• B) Debit Inventory of Supplies, Credit Other Financing Sources.
• C) Debit Expenditures, Credit Other Financing Sources.
• D) Debit Inventory of Supplies, Credit Expenditures.

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Definitions:

Abbreviation

A shortened form of a word or phrase, used to save space or avoid repetition.

Kilogram

A unit of mass equal to 1,000 grams, used in the metric system.

Gram

A metric unit of mass equal to one-thousandth of a kilogram, also used in microbiology as a staining method to classify bacteria.

Pallor

The absence of color in the skin, often indicating anemia or shock, giving it a pale appearance.