a) A general fund uses the consumption method to record inventories. Beginning inventories are $10,000, purchases are $600,000, and ending inventories are $12,000. The general fund records an end-of-year adjusting entry that: Select one:

A. Debits nonspendable fund balance by $2,000

B. Credits nonspendable fund balance by $12,000

C. Debits unassigned fund balance by $2,000

D. Debits nonspendable fund balance by $12,000

b) At the beginning of the year, a special revenue fund purchases equipment for $400,000 in cash. The equipment has a 5-year life, straight-line. The fund still holds the equipment at year-end. How is this equipment reported in the special revenue fund's operating statement for the year? Select one:

A. Expense, $80,000.

B. Expenditure, $400,000.

C. Other financing use, $400,000.

D. Not reported on the operating statement.