Which of the following describes the proper accounting procedure for supplies in the General Fund?
A)Supplies may be accounted for as expenditures either when purchased or when consumed.In either case,material amounts of inventory are shown on the balance sheet
B)Supplies must be accounted for as expenditures when purchased.Therefore,inventories are not shown on the balance sheet
C)Supplies must be initially recorded as assets,and then charged off as expenditures as the supplies are consumed
D)Supplies may be accounted for as expenditures either when purchased or when consumed.If the purchases method is used,inventories are not shown on the balance sheet.

Question

Quizplus · Accepted Answer

CBoth A and C describe acceptable methods for accounting for supplies in the General Fund according to generally accepted accounting principles (GAAP) for governmental entities. A) allows for the choice between the purchases method (expensing supplies when purchased) and the consumption method (expensing supplies when used), with inventories shown on the balance sheet if they are material. C) describes the consumption method, where supplies are initially recorded as assets and then expensed as they are consumed.

Which of the Following Describes the Proper Accounting Procedure for Supplies