The City of Upper Falls Accounts for Its Inventory Using

question 78

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:

Standard Error

The standard deviation of the sampling distribution of a statistic, mostly used to measure the accuracy of a sample's mean.

Population Standard Deviation

A measure of the dispersion or variability of a set of data points in a population, quantifying how much the data points differ from the population mean.

Simple Random Sampling

A sampling method in which each member of a population has an equal chance of being selected.

Subset

A part of a larger set of data, where the elements of the subset are also contained within the larger set.