Chapter 4, Problem 1Q

To determine

Worksheet: A worksheet is the summarized form of accounting information which is made in order to ensure that the accounts are entered correctly to prepare financial statements.

Accounting Cycle: Accounting cycle refers to the process of recording a business transaction in the books of accounts. This cycle concludes when the financial statements are prepared.

To explain: Worksheet is a permanent accounting record and its use is required in the accounting cycle.

Answer to Problem 1Q

Yes, worksheet is permanent accounting record and its use is required in the accounting cycle in order to ensure that the accounts are entered correctly to prepare financial statements.

Explanation of Solution

• A worksheet is prepared to summarize the information needed for the preparation of financial statements.
• Worksheet is useful for preparing the journal entries, financial statements and adjusting entries. It is helpful in every field of accounting cycle.
• Worksheet is used by the accountants as it lowers the risk of mistakes at the time of preparation of final financial statements.
• Worksheet is used to prepare the accounting reports. Worksheet is used to prepare adjusted trial balance by drafting the unadjusted trial balance.
• It can be used for the purpose of planning. Worksheets help the management of company in the timely preparation of financial statements and also in a correct manner.

Conclusion

Thus, worksheet is a permanent accounting record and its use is required in the accounting cycle.