After Preparing an (Unadjusted) Trial Balance at Year-End, R

question 132

Essay

After preparing an (unadjusted) trial balance at year-end, R. Chang of Chang Window Company 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 withdrawal by the owner was recorded to the correct accounts as $90.
4. An additional investment of $5,000 cash by the stockholder 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 errors cause the trial balance to be out of balance?
Error Yes No
1. ________ ________
2. ________ ________
3. ________ ________
4. ________ ________
5. ________ ________
Would the errors cause the trial balance to be out of balance?

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Definitions:

Fixed Length

A predetermined or established length or duration that does not change.

Future Value

Future value is the value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today.

Positive Rate Of Return

A situation where an investment or project yields a profit or return that exceeds the initial outlay.

Projects

Planned sets of interrelated tasks to be executed over a fixed period and within certain cost and other limitations.