Section_Problem_Set_4__solution - AEM 221 Section#4 TA...

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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 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 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
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The 2005 closing entries would include a
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  • Fall '07
  • Expense, Generally Accepted Accounting Principles, insurance policy, Insurance Expense, expense Rent expense, Ryan Company

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