Accounting 1301 Chapter 5 Exam Questions with Correct Answers Latest Update 2025/2026
Accounting Cycle Steps - Answers 1st- analyze business information
2nd- prepare a record of business transactions
3rd-posting (Transferring journal to ledger)
4th- Preparation of the worksheet
5th- Preparing financial statements
6th- Journalizing and posting adjusting entries
Worksheet - Answers is a form used to gather all data needed at the end of an accounting
period to prepare the financial statements
Common Worksheet - Answers The heading-
The company name, report title, and period covered.
5 Sections-
Trial balance, adjustments, adjusted trial balance, income statement, and balance sheet
Each Section-
Includes a debit and credit column.
The worksheet has 10 columns in which to enter dollar amounts
The Trial Balance Section - Answers Recall- if the total debits do not equal the total credits,
there is an error in the financial records.
(1) enter the general ledger account names
(2) transfer the general ledger account balances to the Debit and Credit columns of the trial
balance section
(3) Total the Debit and Credits columns to prove it is in balance
(4) Place a double rule under each Trial Balance column to show that the work in the column is
complete
, Added Accounts- Accumulated Depreciation-Equipment, Supplies Expense, Rent Expense,
Depreciation Expense- Equipment
The Adjustments Section - Answers Journal entries made to update accounts for previously
unrecorded items are called adjustments or adjusting entries.
Recall - Answers Trial Balance- accounts are listed in order
assets
liabilities
owners equity
revenue
expenses
Example for adjustments- - Answers -Eli's consulting services purchased $1,500 of supplies.
-The trial balance shows $1,500 balance in the supplies account.
-This is too high because some of the supplies were used.
An adjustment must be made for used supplies. Otherwise, the asset account "Supplies" is
overstated because fewer supplies are on hand.
The expense account "Supplies Expense" is understated.
The cost of supplies used represents an operating expense that has not been recorded.
The remaining supplies totaled $1,000. Therefore, $500 were used. (1500-1000=500)
The adjustment reduces the supplies account to $1,000. (The amount of supplies remaining)
It increases the Supplies Expense account by $500 (the amount of supplies used)
Accounting Cycle Steps - Answers 1st- analyze business information
2nd- prepare a record of business transactions
3rd-posting (Transferring journal to ledger)
4th- Preparation of the worksheet
5th- Preparing financial statements
6th- Journalizing and posting adjusting entries
Worksheet - Answers is a form used to gather all data needed at the end of an accounting
period to prepare the financial statements
Common Worksheet - Answers The heading-
The company name, report title, and period covered.
5 Sections-
Trial balance, adjustments, adjusted trial balance, income statement, and balance sheet
Each Section-
Includes a debit and credit column.
The worksheet has 10 columns in which to enter dollar amounts
The Trial Balance Section - Answers Recall- if the total debits do not equal the total credits,
there is an error in the financial records.
(1) enter the general ledger account names
(2) transfer the general ledger account balances to the Debit and Credit columns of the trial
balance section
(3) Total the Debit and Credits columns to prove it is in balance
(4) Place a double rule under each Trial Balance column to show that the work in the column is
complete
, Added Accounts- Accumulated Depreciation-Equipment, Supplies Expense, Rent Expense,
Depreciation Expense- Equipment
The Adjustments Section - Answers Journal entries made to update accounts for previously
unrecorded items are called adjustments or adjusting entries.
Recall - Answers Trial Balance- accounts are listed in order
assets
liabilities
owners equity
revenue
expenses
Example for adjustments- - Answers -Eli's consulting services purchased $1,500 of supplies.
-The trial balance shows $1,500 balance in the supplies account.
-This is too high because some of the supplies were used.
An adjustment must be made for used supplies. Otherwise, the asset account "Supplies" is
overstated because fewer supplies are on hand.
The expense account "Supplies Expense" is understated.
The cost of supplies used represents an operating expense that has not been recorded.
The remaining supplies totaled $1,000. Therefore, $500 were used. (1500-1000=500)
The adjustment reduces the supplies account to $1,000. (The amount of supplies remaining)
It increases the Supplies Expense account by $500 (the amount of supplies used)
