Chapter 4, Problem 4Q

To determine

Worksheet: A worksheet is a tool that is used while preparing a financial statement. It is a type of form, having multiple columns and it is used in the adjustment process. The use of a worksheet is optional for any organization. A worksheet can neither be considered as a journal nor a part of the general ledger. Usually organizations use Microsoft Excel in order to use a worksheet electronically.

Net Income: Net income refers to the total earnings or profits of an organization and it indicates how profitable an organization is for a particular period of time. It shows the excess revenue that is left after deducting all the expenses of a company. Net Income can be calculated as follows:

$\text{Net}\text{Income}=\text{Total}\text{Revenues}-\text{Total}\text{Expenses}$

When the total expenses exceed the total revenue, it is called as the net loss for the company. Net loss can be calculated as follows:

$\text{Net}\text{Loss}=\text{Total}\text{Expenses}-\text{Total}\text{Revenues}$

To Identify: In which column of the worksheet the net income and the net loss of a company will be posted based on the given situation in the question.