Suppose that Sherbrooke Company purchased a supply of fuel oil in 2011, paying $20,000 cash. No fuel oil was consumed in 2011. In 2012, $16,000 of fuel oil was consumed, and in 2013, $4,000 was consumed.

There was an expenditure in (when?), and there were expenses in (when?).

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Dec. 31 2011 Dec. 31 2012 Dec. 31 2013 $20,000 Asset $4,000 Fuel oil 0 Expense $16,000 $4,000