If a Government Uses a Perpetual Inventory System for Its

Multiple Choice

If a government uses a perpetual inventory system for its General Fund and there is an inventory overage at the end of the year, the inventory asset account should

A) Be increased and the expenditure account decreased.
B) Be decreased and the expenditure account increased.
C) Remain the same. The expenditure account will be decreased, offset by an allowance for inventory overage account.
D) Remain the same. The expenditure account will be increased, offset by an allowance for inventory overage account.