After Preparing an (Unadjusted) Trial Balance at Year-End, R Would the Error Cause the Trial Balance to Be Out

question 78

Essay

After preparing an (unadjusted) trial balance at year-end, R. Chang of Chang Window Company, Inc. discovered the following errors:
1. Cash payment of the $225 telephone bill for December was recorded twice.
2. Cash payment of a note payable was recorded as a debit to Cash and a debit to Notes Payable for $1,000.
3. A $900 cash dividend paid to the owner was recorded to the correct accounts as $90.
4. An additional investment of $5,000 cash by the owner was recorded as a debit to Common Stock and a credit to Cash.
5. A credit purchase of office equipment for $1,800 was recorded as a debit to the Office Equipment account with no offsetting credit entry.
Using the form below, indicate whether the error would cause the trial balance to be out of balance by placing an X in either the yes or no column. Would the error cause the trial balance to be out of balance? $\begin{array}{c}\begin{array}{lll} \text {Error }\\1.\\2.\\3.\\4.\\5.\end{array}\begin{array}{lll}\text { Yes }\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\end{array}\begin{array}{lll}\text { No }\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\end{array}\end{array}$

Would the error cause the trial balance to be out of balance?

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Definitions:

Time Period Assumption

An accounting principle that states a business's activities can be divided into specific time periods, such as months, quarters, or years for reporting purposes.

Securities and Exchange Commission

An independent federal agency responsible for protecting investors, maintaining fair and orderly functioning of the securities markets, and facilitating capital formation.

IASB

stands for the International Accounting Standards Board, which is an independent, private-sector body that develops and approves International Financial Reporting Standards (IFRS).

Measurement (Cost) Principle

An accounting principle that states that accounting information should be based on actual cost.