CPA Study Group
The question asks: Which of the statements is true in preparing financial statements for the fund-based statements.
The correct answer is slightly confusing.
The 100,000 expenditure for supplies under "Purchase method" is accounted for on the date of purchase. When preparing fund-statements for the end of a period there is NO entry for Expenditures. The correct answer says 100,000. That is not clearly distinguished in the question. You still can get the answer because no other answer makes any sense.
FYI: for anyone that stumbles on this one.
They are just talking about what would appear on the financials at the end of the year, not the required adjusting entries. The $100k expenditure under the purchase method from the earlier journal entry would show up on the financials at the end of the period.