Chapter 4, Problem 1QS

To determine

Concept Introduction:-

• A worksheet is a useful tool in preparing accounting information.
• It helps in working with a large number of accounts and adjustments.
• It is not a required report but it helps in preparing monthly or quarterly financial statements when adjusting entries are done till the year-end.
• It saves time in analyzing and interpreting the accounts.
• It helps in planning processes. The worksheet is used to make adjusting journal entries and it helps in examining the overall effect of the entries before posting the entries.
• The preparation of the worksheet involves five steps.

To Explain:-

• Steps in preparing a worksheet in their proper order

5 a. Total the statement columns, compute net income (loss), and complete the worksheet.
4 b. Extend adjusted balances to appropriate financial statement columns.
1 c. Prepare an unadjusted trial balance on the worksheet.
3 d. Prepare an adjusted trial balance on the worksheet.
2 e. Enter adjustments data on the worksheet.