Mallory Rice owns a small dog-walking service. Because she has taken an accounting class, she understands the importance of maintaining accounting records. She has been recording transactions in the journal and posting them to the ledger. After one year, her business really grows and she determines she may benefit from purchasing software to help her keep track of transactions and her customers. She needs a new computer and wants to take a loan from the bank to help her pay for it. The bank requests that she provides financial statements of her first year of operations. She gets to work on the financial statements by preparing a trial balance. Unfortunately, the total debits do not equal the total credits on the trial balance. Mallory decides that since it is her company, she will just add $500 to the Cash account to get the trial balance to balance.

Instructions
Answer the following questions.
a. Do you agree with Mallory’s decision?
b. What are the consequences of this decision?