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BU6005 / Quiz 1

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Quiz 1

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Question 6
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On July 1 of the current calendar year,

Plum Company paid $9,400 cash for
z management services to be
2
performed over a two-year period
beginning July 1. The adjusting entry
on December 31 of the current year
for Plum would include:

' a. A debit to a prepaid expense

and a credit to an expense for
$2,350.

' b. A debit to an expense and a

credit to a prepaid expense
for $2,350.

' c. A debit to an expense and a

credit to a prepaid expense
for $7,050.

' d. A debit to a prepaid expense

and a credit to Cash for
$7,050.

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