Section_Problem_Set_4__solution

Section_Problem_Set_4__solution - AEM 221 Section #4 * TA...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
AEM 221 Section #4 ** TA ANSWER KEY ** Name: Section: Multiple Choice. 1. On December 31, 2009, the effect of recording an adjustment for accrued wages of $2,000 would be A) a decrease in stockholders' equity and decrease in an asset. B) a decrease in liabilities and increase in stockholders' equity. C) a decrease in stockholders' equity and an increase in liabilities. D) an increase in stockholders' equity and increase in an asset. E) none of the above is correct. 2. On April 1, 2007, the premium on a one-year insurance policy on equipment was paid amounting to $3,000. At the end of 2007 (end of the accounting period), the financial statements for 2007, would report A) Insurance expense, $3,000; Prepaid insurance $0. B) Insurance expense, $0; Prepaid insurance $3,000. C) Insurance expense, $750; Prepaid insurance $2,250. D) Insurance expense, $2,250; Prepaid insurance $750 . E) None of the above is correct. 3. On January 1, 2009, Ryan Company paid the premium in advance on a three-year insurance policy on equipment in the amount of $6,000. At that time, the full amount paid was recorded as prepaid insurance. On December 31, 2009, the end of the accounting year, Ryan Company would be required to record an adjusting entry that would include a A) $6,000 credit to prepaid insurance. B) $2,000 debit to insurance expense. C) $2,000 debit to prepaid insurance. D) $6,000 debit to insurance expense. E) none of the above. 4. At the end of 2005, the following data were taken from the accounts of Sante Fe Trading Company: Contributed Capital $ 285,000 Retained earnings, beginning balance January 1, 2005 200,000 Total revenue earned during 2005 850,000 Total expenses incurred during 2005 790,000 Total cash collected during 2005 870,000
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The 2005 closing entries would include a A) $80,000 net credit to Retained earnings. B) $80,000 net debit to Retained earnings.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/27/2008 for the course AEM 2210 taught by Professor Little,j. during the Fall '07 term at Cornell.

Page1 / 6

Section_Problem_Set_4__solution - AEM 221 Section #4 * TA...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online