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218) 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 owner was recorded as a debit to R, Chang, Capital 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. Error 1. 2. 3. 4. 5. Answer: Error 1 2 3 4 5

Yes

Yes

No

No X

X X X X

Difficulty: 3 Hard Topic: Preparing a Trial Balance Learning Objective: 02-P2 Prepare and explain the use of a trial balance. Bloom's: Apply AACSB/Accessibility: Analytical Thinking / Keyboard Navigation AICPA: BB Industry; FN Decision Making

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