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

question 205

Essay

After preparing an (unadjusted) trial balance at year-end,
G. Chu of Chu Design 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 dividend 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.
$$\begin{array} { | c | l | l | l | } \hline \text { Error } & \text { Yes } & & \text { No } \\\hline 1 . & & & \\\hline 2 . & & & \\\hline 3 . & & & \\\hline 4 . & & & \\\hline 5 . & & & \\\hline\end{array}$$

---

Definitions:

Arbitration

A form of alternative dispute resolution where a neutral third-party makes a binding decision to resolve a dispute, avoiding court litigation.

Binding

Describes an agreement, contract, or legal decision that must be adhered to by the parties involved.

Appealed

To apply to a higher court for a reversal of the decision of a lower court.

International Arbitration

A process used to resolve disputes between parties from different countries outside the courts, using agreed upon arbitrators.