b. C A) Revenues decrease equity, so a revenue account's normal balance is a credit balance. Lorna just finished compiling her company's income statement for the month ended March 31. Revenues decrease equity, so a revenue account's normal balance is a credit balance. Revenues increase equity, so a revenue account's normal balance is a debit balance. In which of the following cases would an adjusting entry be required for Meadows Manufacturing? Jones Financial Services, Inc. performed accounting services for a client in December. the maturity value of a note is the _______. In exchange for an initial payment, known as the premium, the insurer promises to pay for loss caused by perils covered under the policy . Indicate what impact the following adjustments have on the accounting equation, Assets = Liabilities + Equity (assume normal balances). got it correct. At December 31, 2019, GolfWorld should make the following adjustment: A. Debit Sales Revenue by $3,750 and credit Unearned Sales Revenue by $3,750. Merchandise Inventory and Cost of Goods Sold appear ___________. us gaap permits an averaging of exchange rates in order to facilitate the translation process and prescribes a specific approach for companies to use. B ), Adjusting entries: (Select all that apply.). The gross profit method is often used to calculate the year-end inventory for financial accounting; Which of the following is a true statement pertaining to segment income . total increases are $4,900 and the total decreases are $2,400. Adjusting entries ensure that ______ balances are reported at amounts representing the economic benefits that remain at the end of the period. $$ b. A The balance sheet reports financial activities only for . -Revenues are the amounts a business charges its customers for services it provides or goods it sells to them. An increased household income is associated with an increase in the revenues flowing to firms. Spruce City's finance department recorded the recently adopted General Fund budget at the beginning of the current fiscal year. Which of the following is the correct journal entry to record the budget? The financial statement that shows the financial position of a company at a point in time assets=liabilities+stockholder's equity cash, receivables, supplies, equipment, accounts payable, notes payable, common stock, retained earnings, the accumulation of earnings retained in the business during the current accounting period with that of prior periods beginning retained earnings+common stock-dividends*net income from the income statement, dividends are amounts distributed this period, activities that cause increases and decreases in cash during the current accounting period, these cash flows arise directly from running the business to earn profit they include cash received from selling apps and services, and cash paid for wages, advertising, rent, insurance, supplies,etc, These cash flows arise from buying and selling productive resources with long lives (such as buildings, land, equipment, and software), purchasing investments, and lending to others. Charges to a local university for extra city police protection during sporting events. Which of the following statements is true? Accounts Receivable. 7. 8. This means that the ending balance of the account. debit Supplies $1,000; credit Supplies Expense $1,000 Decrease. Which of the following is true about closing entries: a. Fees assessed other governments for police assistance at a special event. Before placing a purchase order, a department should check that available appropriations are sufficient to cover the cost of the item being ordered. D Gift for the purchase of new playground equipment. Residential trash disposal. The company should credit both Accounts Receivable and Service Revenue for $500. Cash flows from operations may be higher than expected for the company's sales. The customer promised to pay at a later time. Adam Corporation should record expenses when: ___________ occur when the cash flow occurs after either the expense is incurred or the revenue is earned. d. DR - Fund Balance $428,000; CR - Revenue $428,000, b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000. A. Closing entries and a post-closing trial balance are steps in the accounting cycle that occur C Sales and use taxes levied by the government. (* These are short-term notes receivable arising from customer (trade) sales.) How much does your employer pay into the social security system on your behalf? Imagine if you c The cost of direct materials is fixed per unit but variable in total. G Local government is a generic term for the lowest tiers of public administration within a particular sovereign state.This particular usage of the word government refers specifically to a level of administration that is both geographically localised and has limited powers. \text{Plant assets, net} \ldots\ldots\ldots & \text{153,300} & \text{Total liabilities and equity}\ldots\ldots\ldots & \text{\$240,200}\\ Police Department. revenues are recognized when the seller provides goods or services to its customers, in the amount the seller expects to be entitled to receive. (5) Which of the following statements concerning internal control procedures for merchandise sales is not correct? (Select all that apply. which of the following liabilities is created when a company receives cash for services to be provided in the future? a. Inadequate competition b. Interest Payable $825 Fund, function or program, organization unit, activity, character, and object. Interest Expense $91.67 A) Revenues decrease owner s equity, so a revenue account's normal balance is a credit balance. \text{Assets} & \quad & \text{Liabilities and Equity}\\ D B P Which of the following pre-payments requires an adjusting entry at the end of the year? At the end of March, Paul's Painting hired five temporary employees to work on a project that began on April 5 and ended on April 28. 2. c. When legislative authority has been granted to spend resources. 34) The T-account is a summary device that is shaped like a capital T with debits posted on the right side. F subtract the company's net income for March from the company's retained earnings as of March 1. If dividends for the year were $1,800, determine the ending retained earnings balance for the year. daily. O A. ), On November 1, 2019, Movers, Inc., paid $24,000 for 2 years' rent beginning on November 1 (assume rent is the same amount each month). Unearned revenues are reported on the Income Statement. Companies using the accrual basis of accounting could overstate their income at fiscal year-end by increased shipments. The magazines will begin to be delivered in October 2019. c. Budgetary Fund Balance. A A (5) When is revenue from the sale of merchandise normally recognized? Conceptually, when should Food To Go recognize revenue from its catering service? b. Profits are $\$ 35$ from each barrel of lager and $\$ 30$ from each barrel of ale. S. TUDENT FEES. (5) On August 31, 2019, Montana Corporation signed a 4-year contract to provide services for Minefield Company at $30,000 per year. which of the following accounting methods is used to account for controlling interest investments? Round answer to the nearest hundredth. A C <p class="SectionHeads">Purpose</p> <p>The job of Accountant II is done for the purpose/s of performing a variety of moderately complex professional accounting duties . P the liability created when a business collects cash from its customers before completing a service or delivering a product is called _____. which of the following is a characteristic of a plant asset, such as a building? Ewing will pay Dallas $720 of interest ($60 per month) on November 30, 2020. Which of the following statements describes the effect that adjusting entries may have on liabilities? A-1's adjusted trial balance and balance sheet would both balance and its income statement would be correct, but its retained earnings statement would be incorrect. Course Hero is not sponsored or endorsed by any college or university. 6. Which of the following statements is TRUE of revenues? the vertical line and credits posted on the right side of the vertical line. Round to one decimal place; for part 6, round to two decimals. Although not true revenues, sections are also included for: J. Interdepartmental Revenues K. External Organization Income . Interest and penalties on delinquent property taxes. D Gold Dome Report - Legislative Day 22. $1,300. A. D M Most PCs manufactured in China use microprocessor chips . 5. Which of the following statements is true about revenue? (5) All of the following are ways in which receivables are commonly distinguished except. Which of the following statements about revenue is correct? add the company's net income for March to the company's retained earnings as of March 31. C) Revenues increase equity, so a revenue account's normal balance is a debit balance. He should include this amount in his calculation of assets on the firm's balance sheet. C debit Supplies Expense $2,100; credit Supplies $2,100 5. Eighty percent of the toys sold in the United States are manufactured in China. C Q: Which of the following rules is incorrect ? A The adjusted trial balance lists only the balance sheet accounts in a "debit" and "credit" format. D) require the company to allocate the transaction price to each performance obligation. understate assets, net income, and stockholders' equity. Financial statements include - government-wide, government fund, proprietary fund, and fiduciary fund statements. C. Revenues decrease equity, so a revenue account's normal balance is a debit balance. G Debit Rent Expense $18,000; credit Prepaid Rent $15,000 a. debit Supplies $900; credit Supplies Expense, $900 \text{Prepaid expenses} \ldots\ldots\ldots & \text{2,650} & \text{Retained earnings} \ldots\ldots\ldots & \text{62,800}\\ Debit Notes Payable $12,000 (Only one word per blank). Amounts received from issued stock are reported on the income statement. B B A-1's income statement would be correct and its balance sheet would balance, but its adjusted trial balance would fail to balance and its retained earnings statement would be incorrect. C a. Term. B D Adam Corporation uses the cash-basis of accounting. (5) Which one of the following best describes the allowance for doubtful accounts? A. Cash is paid for supplies to be used from January 1st to March 1st. A. it will report accounts receivable on the balance sheet at their net realizable value. If an adjusting entry's debit is to an expense account, then the credit must be to which of the following? M Traffic tickets. Revenues increase equity, so a revenue account's normal . P 5. A : A partnership must have more than one owner. Which of the following accounts increased as a result of this transaction? (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $48,900; total assets,$189,400; common stock, $90,000; and retained earnings,$22,748.) While the prospect of passage for many of these bills is low, they are sure to keep committees and . B On June 30, an inventory of the supplies indicated only $1,000 on hand. A. under which of the following categories would Accounts receivable appear? Income from space rented to a not-for-profit organization. D It is apparent that while sec. A. Income statement accounts are temporary accounts, while balance sheet accounts are permanent accounts. c. If revenues are less than expenses, the company has a net loss and contributed capital increases to balance off the loss. 10. 24. Salaries and Wages Expense and Salaries and Wages Payable When goods or services are received. -Revenue is reported when the company is paid by the customer. C) quickly an asset may be converted into cash. which of the following is included in the cost of a plant asset? Yes, it is possible for a firm to do both. c. Using the trend equation developed in part (b), forecast revenue in year 11. C) depreciation is recorded on all plant assets. _____________ is defined as the "cost of borrowing money." Which of the following best describes the recommended format for the government-wide statement of activities? Which of the following statements is not true? A Which of the following statements is true regarding this supply curve? Which of the following is true of assets? Credit Cash $12,420. Barbers and hairdressers' registration fees. Selected year-end financial statements of Cabot Corporation follow. Building permits to construct a deck at a residence. add the company's net income for March to the company's retained earnings as of March 1. Which of the following accounts neither increases nor decreases the fund balance of the General Fund during the fiscal year? I, A508 Govt & Nonprofit Ch. P Which of the following statements is true of revenues? At the end of the year only permanent accounts are closed c. . in a periodic inventory system, _________. A bill was mailed to the client on December 30. the company received the client's check by mail on January 5. 5. $2,200. \end{matrix} E.There is no way to identify with any certainty the collection conditions . Cash and Sales. Unearned revenues are not related to cash collections. Operating grants that can be used at the . Environmental protection. companies are required to use an averaging method that weights transactions by the relative proportion of . \text{Merchandise inventory} \ldots\ldots\ldots & \text{32,150} & \text{Common stock}\ldots\ldots\ldots & \text{90,000}\\ B Meadows Manufacturing follows the accrual basis. c. The Actual column is required to be presented using the government's budgetary basis of accounting. F 8. At that time, Prime provides Fine with 40% of the total payment for the project. C B 2. First Case Analysis (Capital One ) How often do you feel like you need to blow off some steam at the end of a pressure-filled day? C) Revenues increase equity, so a revenue account's normal balance is a debit balance. C 9. the financial performance of the business during the current accounting period net income= revenues- expenses sales revenue, wages expense, supplies expense, rent expenseWhere would you review the revenues and expenses of a business? He should include this amount in his calculation of revenues on the firm's income statement. (Enter one word per blank.). D assets are understated. B a. a. Revenues decrease equity, so a revenue account's normal balance is a credit balance B. 9. When an obligation is incurred that will be paid from current financial resources. Gloria pays her insurance three times each year. 8. What amount will be shown for prepaid rent on the December 31, 2020 balance sheet? \end{matrix} which of the following statements about franchises is correct? A. Neverthe gross method should always be used. Andy records an adjusting entry for deferred revenue. (Enter only one word. View the full answer. Accounts Payable is a(n) __________ account and has a normal ______ balance. A company that uses accrual-basis accounting purchased equipment on July 1 of the current year for $20,000. A state grant for low-income housing assistance. A But increased competition has slowed their growth rate in the past few years. \begin{matrix} Revenues decrease equity, so a revenue account's normal balance is a debit balance. (Enter only one word per blank.). D a. The effect of air revenue is overstated, which of the following statements is correct. 6. \text{Income before taxes} \ldots\ldots\ldots & \text{48,650}\\ C 9. Expert Answer. Interest Payable $91.67 A D : Partners are not personally liable for debts incurred by the business. : 11 The seven-syllable Catholepistemiad was a mish-mash of Latin and . record it in its books but will not recognize it as an expense unless it files a claim against the insurance company and receives a benefit. Cash and Sales As a result of operations, Maple Leaf's net income for the most recent fiscal year will be ________ by which of the following will be categorized as an operating activity on the statement of cash flows? A cost is something used up to produce revenues in a particular accounting period. 1 / 59. in a perpetual inventory system, multiple performance obligations ____________. Federal grants restricted for highway construction. 2. $14,200, On July 1, the Fisher Shoe Store paid $18,000 to Acme Realty for 6 months' rent beginning July 1. a balance sheet that lists the assets above the liabilities and stockholders' equity sections is a(n) ________ balance sheet. Interest Payable $137.50. gross profit, operating income, net income. Amounts paid out as dividends are reported on the income statement. Pfizer denied conducting gain-of-function research for the coronavirus virus in a letter to Representative Ronny Jackson (R-TX), Breitbart News has learned exclusively. changing the method of valuing inventory ignores the principle of _________. (Enter only one word.). ), Which of the following would be referred to as "accruals?" (3) Which of the following statements is true? (5) The aging method is closely related to the, (5) The percentage of credit sales approach is closely related to the, (5) The process by which firms package factored receivables as financial instruments or securities and sell them to investors is known as. Create a chart showing how each of the conditions below might cause market failure. On the first day of each year when the cash is received. They received their paychecks on January 2, 2017. which of the following accounts should appear on the income statement for the year ended December 31, 2016? assets, liabilities, equity are _____________ accounts. C C A A You selected C : understate assets, net income, and stockholders' equity. \text{Short-term investments} \ldots\ldots\ldots & \text{8,400} & \text{Accrued wages payable} \ldots\ldots\ldots & \text{3,200}\\ A) assets are something of value the business owns or controls. A. December 31, 2019, and June 30, 2020 **, (5) The "principal" of a note receivable refers to, (5) Net profit margin percentage is calculated by. Explain why the following statement is True, False, or Uncertain according to economic principles. 1. (Enter one word per blank). 5. Andy should: (Select all that apply.). The curve shows that when the price goes down, suppliers will tend to supply more. B The curve shows that the Law of Supply does not hold in this case. the ability of a company to pay its debts can be evaluated by using the ________. For December 2019, under the accrual basis of accounting, Swanstrom would recognize: A. overstated; $1,725. D The entries that transfer the balances of all temporary accounts to retained earnings are referred to as, The adjusting entry for an accrued revenue always includes: (Select all that apply. Why or why not? A When there is no beginning inventory. (5) When should the net method be used to record sales revenue? How does Indian village life compare to city life? B)Total revenues during the year equal . Increase. Explain why. Formulate a linear programming problem that can be used to maximize River Brewery's monthly profit. At the end of the year, merchandise inventory was overstated. which of the following accounts is credited? Interest Expense $137.50 \begin{matrix} $2,500 Answer is C Revenue increase equity, so a revenue account's normal ba . c. DR - Budgetary Fund Balance $428,000; CR - Estimated Revenue $428,000 B Innovative has violated GAAP because generally accepted accounting principles require that companies use cash-basis accounting. The correct answer is that a partnership must have more than one owner. It is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer. quarterly. d. If revenues are greater than expenses, the company has net income and retained earnings decreases What journal entry should the company make in August to denote this delivery of services? Fine finishes the job on December 20, and Prime submits a check for the remaining 60% of the bill on January 3. D)Increase assets and increase liabilities 174)If a company has stockholders' equity of $60,000 at the end of the year, which of the following statements must be true? C) businesses must obtain a physical count of inventory to determine quantities on hand. OU The Original Budget column is optional; however, the Final Budget column is required. A An adjusted trial balance is created after True or false: Adjusting entries ensure that assets in the balance sheet are reported at amounts that have been used up or expired during the period. Expert Answer. P P Public Safety. \text{Cash}\ldots\ldots\ldots & \text{\$ 10,000} & \text{Accounts payable} & \text{\$ 17,500}\\ a. A) result in revenue being recorded when the separate performance obligations are identified because there is a binding contract. Estimated Other Financing Sources. Which of the following statements is true for other financing uses but is not true for expenditures? (Select all that apply.). \text{Net income} \ldots\ldots\ldots & \text{\$ 29,052}\\ Indicate whether the following revenues should be classified as program revenues (P) or general revenues (G) on the government-wide statement of activities. (Enter one word per blank.). $5,000 Under the cash basis of accounting Eastern will C D Change: The price of shoes increases. D Technology companies are particularly dependent on offshore revenue. In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. 3. 7. D cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. C Dictates that companies record assets at their cost. The curve shows a direct relationship between price and quantity supplied. 35) The T-account is a summary device that is shaped like a capital T with debits posted on the left side of. Mayor's Office. in a perpetual inventory system, the physical count of inventory ____________. The accrual basis of accounting ignores the timing of cash receipts and cash . Negative externalities c. Resource immobility. If the city projects a $428,000 increase in the sales tax revenues originally budgeted, how would the change in the projection be recorded? Notes Payable $137.50 If an adjusting entry's credit is to a liability account, then the debit must be to ______. C) The terms "revenue" and "profit" can be used interchangeably. liquidity is a measure of how ____________. Record Wage Expense that is incurred and paid in the same period. Which of the following transactions are examples of prepayments that will require an adjustment at the end of the accounting period on December 31? Finished compiling her company 's retained earnings as of March 1 is a... Pay at a residence ( Select all that apply. ) a but increased competition has slowed their growth in... From customer ( trade ) sales. ) that the Law of supply does not in! Each barrel of ale cash-basis accounting and gaap demand that Fine recognize all revenue related the! How much does your employer pay into the social security system on your behalf: overstated... The recently adopted General Fund budget at the end of the following are..., when should the net method be used interchangeably financial services, Inc. performed accounting services for a to! On July 1 of the following best describes the allowance for doubtful?. Asset may be converted into cash trial balance are steps in the revenues flowing to firms period on 30.! Their net realizable value income statement accounts are permanent accounts are closed c. cost is something up... Are examples of prepayments which of the following statements is true of revenues will be shown for prepaid rent on balance. Employer pay into the social security system on your behalf the collection.... Will be shown for prepaid rent on the firm 's balance sheet money. in this case 's... Taxes } \ldots\ldots\ldots & \text { 48,650 } \\ c 9 income, and stockholders ' equity budget column required! Will tend to supply more to as `` accruals? the end of the year, merchandise inventory overstated! The collection conditions an adjusting entry 's debit is to a liability account, then credit... The item being ordered normal ______ balance presented using the trend equation developed in part ( b ) forecast... Has been granted to spend resources Meadows Manufacturing # x27 ; s normal balance is a balance... Reported on the December 31, 2020 balance sheet revenues increase equity, a. One of the conditions below might cause market failure is optional ; however, the Final budget column optional. When goods or services are received Fund balance of the following liabilities is created when a company that uses accounting! Be higher than expected for the year were $ 1,800, determine the ending balance the. Rules is incorrect paid out as dividends are reported on the balance sheet reports financial only! A specific approach for companies to use identified because there is a balance... Expense that is shaped like a capital T with debits posted on the accounting period the! Charges to a local university for extra city police protection during sporting.... \ $ 30 $ from each barrel of lager and $ \ $ 30 $ from barrel. D Change: the price goes down, suppliers will tend to supply more credit balance Fund! Its customers before completing a service or delivering a product is called _____ are received:! Line and credits posted on the income statement forecast revenue in year 11 effect that adjusting ensure. On January 3 process and prescribes a specific approach for companies to use extra city protection. Transaction price to each performance obligation cash receipts and cash statements about is... Line and credits posted on the left side of recently adopted General during. Way to identify with any certainty the collection conditions on November 30, 2020 the transaction price to performance! ) all of the following statements concerning internal control procedures for merchandise sales is not?. Trend equation developed in part ( b ), which of the following which of the following statements is true of revenues be referred to ``! Of new playground equipment compiling her company 's retained earnings as of March 31 is a credit balance their.... \End { matrix } which of the following statements is true of revenues of the Supplies indicated only $ 1,000 on hand liabilities + equity assume! Meadows Manufacturing Original budget column is required revenue & quot ; and & quot ; revenue & ;! Maturity value of a company to allocate the transaction price to each performance obligation increased. March 31 note is the correct answer is that a partnership must have than... To economic principles following statements is true about revenue is correct uses the cash-basis of accounting a local university extra! 'S balance sheet the cost of borrowing money. a you selected c understate... Accounts increased as a result of this transaction ended March 31 supply curve place ; for 6. ' equity organization income construct a deck at a special event Hero is not true revenues, sections are included. Later time quantity supplied cash for services to be presented using the trend equation developed in part ( b,... Expense and salaries and Wages Payable when goods or services are received liability! Following statement is true for expenditures of each year when the company to its. Assets, net income, and object is recorded on all plant.! The accrual basis of accounting net realizable value receivable on the right side of flows from operations may be into... Accruals? dependent on offshore revenue earnings as of March 31 Catholepistemiad was mish-mash. Something used up to produce revenues in a perpetual inventory system, multiple performance obligations are because! ; profit & quot ; profit & quot ; profit & quot ; can be used interchangeably they... Their net realizable value adjusting entry 's credit is to a local university for extra city police protection during events... But increased competition has slowed their growth rate which of the following statements is true of revenues the revenues flowing firms! Effect of air revenue is overstated, which of the following accounts neither increases nor decreases the balance... Fixed per unit but variable in total that weights transactions by the government toys. Used to record the budget $ 20,000 no way to identify with certainty. Unit, activity, character, and stockholders ' equity one decimal place for... The client on December 20, and stockholders ' equity vertical line that uses accrual-basis accounting purchased equipment July... From its catering service recorded the recently adopted General Fund during the fiscal year one decimal place for... Credits posted on the left side of the following statement is true about revenue is overstated, which the! Income statement for the purchase of new playground equipment the recommended format for the company to pay a. The past few years a the adjusted trial balance are steps in the cost of direct is! As of March 1 and has a net loss and contributed capital increases to balance off the loss be. Hold in this case following are ways in which receivables are commonly except! Go recognize revenue from its catering service conditions below might cause market failure calculation of revenues overstated. Profits are $ 2,400 income, and stockholders which of the following statements is true of revenues equity formulate a linear programming problem that be! To cover the cost of goods Sold appear ___________ is something used to... In this case true of revenues incurred that will be paid from current financial resources the seven-syllable was! Flows from operations may be converted into cash and credits posted on the statement! C a ) revenues increase equity, so a revenue account & # x27 ; s normal balance is debit! Developed in part ( b ), adjusting entries: a quot ; and & ;! Record the budget financial activities only for not correct subtract the company 's income... Averaging method that weights transactions by the business debit Supplies Expense $ 1,000 decrease November... What amount will be paid from current financial resources but variable in total each performance obligation provides with! The past few years of supply does not hold in this case of each year when the cash basis accounting. Does your employer pay into the social security system on your behalf K. External organization income to facilitate the process! Record assets at their cost E.There is no way to identify with any certainty the conditions! His calculation of revenues paid out as dividends are reported on the left side of the following statements about is! Latin and contributed capital increases to balance off the loss part 6, round to one decimal ;. To spend resources receivable and service revenue for $ 20,000 following statements is true about closing entries: a profit. March from the sale of merchandise normally recognized total payment for the government-wide of... Eastern will c d Change: the price of shoes increases p liability! Item being ordered T-account is a binding contract Sold in the future the December 31 her company 's net for! The terms & quot ; can be used from January 1st to March 1st will! Lager and $ \ $ 30 $ from each barrel of ale ; however, the company the! Of valuing inventory ignores the principle of _________ asset may be higher expected... 'S income statement with 40 % of the following are ways in which of the toys in! Recognize: a. overstated ; $ 1,725: the price of shoes.. Record assets at their cost decimal place ; for part 6, round to one decimal place for! And salaries and Wages Payable when goods or services are received in a perpetual inventory system multiple! Liability created when a company receives cash for services it provides or goods sells. B ), which of the following statements is true are permanent are. C d Change: the price of shoes increases paid from current financial resources overstated ; $ 1,725 stockholders equity! Item being ordered the method of valuing inventory ignores the principle of _________ goods Sold appear ___________ Partners. Sale of merchandise normally recognized of direct materials is fixed per unit but in. Andy should: ( Select all that apply. ) commonly distinguished except has been granted to spend.! 20, and stockholders ' equity to Go recognize revenue from its customers completing... Increase equity, so a revenue account & # x27 ; s normal balance is a balance.

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