What Is False Regarding the Two Methods for Recording Inventories

Multiple Choice

What is false regarding the two methods for recording inventories in governmental funds?

A) The consumption method debits inventory when purchased and charges expenditures for the amount consumed.
B) The purchases method debits expenditures when inventories are purchased and adjusts the inventory balance at year end.
C) The amount of expenditure reported at year end will differ from method to method.
D) The purchases method is preferable since it requires no adjustment to supplies expense when preparing the government-wide statements.