Joined: 04 Dec 2008 Location: United States
Online Status: Offline Posts: 504
Posted: 21 Nov 2009 at 21:15 | IP Logged
There is a small chart on page F8-21 in the Becker book.
It shows the options for Expenditure recognition:
PURCHASE METHOD When buying item: Dr. Expenditure Cr. Vouchers payable
When use of item: No entry
When on-hand at year end: Dr. Supplies inventory Cr. Reserve for supplies
CONSUMPTION METHOD When buying item:
Dr. Supplies Inventory
Cr. Vouchers payable
When use of item: Dr. Expenditure Cr. Supplies inventory
When on-hand at year end:
No entry
Now assume that you have inventory left over at the year end. In the purchase method, you expensed everything that you purchased. But in the consumption method, you expensed as you sold the inventory. So does that mean that you will have higher expenditures in the purchase method?
__________________ B:85
A:90
R:92
F:90
My inspiration: "O mankind! We have created you male & female, & have made you nations & tribes that ye may know one another. The noblest of you is the best in conduct."-Quran
Joined: 04 Dec 2008 Location: United States
Online Status: Offline Posts: 504
Posted: 22 Nov 2009 at 01:37 | IP Logged
Hey, sorry I wasn't home. I'm on now, or you can shoot me an email at my Yahoo address.
__________________ B:85
A:90
R:92
F:90
My inspiration: "O mankind! We have created you male & female, & have made you nations & tribes that ye may know one another. The noblest of you is the best in conduct."-Quran
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Topic: Governmental accounting
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