The City of Upper Falls Accounts for Its Inventory Using

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.