Shoshone County uses the consumption method to account for supplies. At the beginning of the year the city had no supplies on hand. During the year the city purchased $450,000 of supplies for use by activities accounted for in the general fund. The city used $300,000 of those supplies during the year. At fiscal year-end the appropriate account balances on the government-wide financial statements would be
A) Expenses $450,000; Supplies inventory $150,000.
B) Expenses $450,000; Supplies inventory $0.
C) Expenses $300,000; Supplies inventory $150,000.
D) Expenses $300,000; Supplies inventory $0.

Question

Quizplus · Accepted Answer

The consumption method records supplies expenses as they are used, so $300,000 is recorded as expenses for the supplies used, and the remaining $150,000 of supplies not used is recorded as supplies inventory.

Shoshone County Uses the Consumption Method to Account for Supplies