Blue Ridge Township Uses the Consumption Method of Accounting for Its

Multiple Choice

Blue Ridge Township uses the consumption method of accounting for its inventory of supplies.On the December 31,20X7 balance sheet for the general fund,the township reported $10,000 of supplies inventory.During 20X8,expenditures for supplies amounted to $40,000,and,at December 31,20X8,unused supplies totaled $7,000.In the adjusting entry for supplies at December 31,20X8,

A) Expenditures should be credited for $3,000.
B) Expenditures should be debited for $3,000.
C) Fund Balance-Nonspendable should be debited for $7,000.
D) Fund Balance-Nonspendable should be credited for $7,000.