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,

Question

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

Answer 1

Answer: D