Chapter 4, Problem 5Q

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.

Financial Statements: Financial statements are the financial reports that a company prepares in order to disseminate the information about its financial position and performance for a particular period of time. It is the major source of information for the stakeholders of the company from where they can collect real-time information about the performance and financial position of the company and proceed with the informed decision making. The three financial statements of a company include the balance sheet, income statement and the cash flow statement.

To Justify: The necessity of preparing the formal financial statements if all the data are in the statement column of the worksheet.