Which of the Following Is Correct with Respect to Accounting

question 110

Multiple Choice

Which of the following is correct with respect to accounting for supplies inventories in a governmental fund?

• A) Supplies inventories may be recorded using either the purchase method or the consumption method.
• B) An amount equal to the ending balance of supplies is reported as Nonspendable Fund Balance.
• C) The consumption method is preferable over the purchase method since it requires no adjustment to supplies expense when preparing the government-wide statements.
• D) All of the above are correct

---

Definitions:

Exclusive Right

A legal entitlement granting someone the sole authority to engage in a certain activity or use a specific property.

Profit

The financial gain obtained when the total revenues generated from selling goods or services exceed the total costs and expenses to produce them.

Exclusive Right

Exclusive Right is a legal entitlement that grants the holder the sole privilege to perform, use, or sell a particular service, product, or piece of intellectual property.

Marginal Revenue

The additional revenue that a company receives from selling one more unit of a product or service.