The City of Upper Falls Accounts for Its Inventory Using

question 10

Multiple Choice

The City of Upper Falls accounts for its inventory using the purchases method.During the year the City bought $500,000 of supplies, for which it owed $100,000 at year-end.The City will pay for the supplies from available expendable financial resources.The entry that should be recorded in the City's General Fund is

• A)Debit Expenditures $500,000; Credit Cash $400,000 and Accounts payable $100,000.
• B)Debit Expenditures $400,000; Credit Cash $400,000.
• C)Debit Supplies inventory $500,000; Credit Cash $400,000 and Accounts payable $100,000.
• D)Debit Supplies inventory $400,000; Credit Cash $400,000.

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Definitions:

IFAC's Code

The ethical code established by the International Federation of Accountants, which sets standards for professionalism and ethics in accounting.

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