#4.2 : Completing the accounting cycle: Worksheet Preparation

Question 1

It is a common tool used by accountants to assemble on a sheet of paper all the information needed to prepare the financial statements, adjusting entries, and the post-closing trial balance.

Answer 1

Worksheet

Question 2

Why do accountants prepare a worksheet?

Answer 2

Accountants often use worksheet to help transfer data from the unadjusted trial balance to the financial statements. This multicolumn document provides an efficient way to summarize the data for financial statements. The accountant generally prepares a worksheet when it is time to adjust the accounts and prepare financial statements.

Question 3

The heading of the worksheet states the following:

Answer 3

1. Name of the business
2. Title of the report; and
3. Date covered by the report.

Question 4

The accounts in the ledger are listed where?

Answer 4

Accounts

Question 5

The ending balances of the accounts in the general ledger are listed where?

Answer 5

Unadjusted trial balance

Question 6

The debits and credits of the adjusting entries are placed where?

Answer 6

Adjustments

Question 7

The adjusted balances (Computed by combining amounts in the unadjusted trial balance and adjusting entries) are placed where?

Answer 7

Adjusted trial balance

Question 8

The adjusted amounts of income and expense accounts are extended where?

Answer 8

Income statement

Question 9

The adjusted amounts of assets, liabilities and equity accounts are extended where?

Answer 9

Balance sheet

Question 10

Account titles used in the adjusting entries but were not previously included in the unadjusted trial balance are placed……

Answer 10

at the bottom part of the “Accounts” column of the worksheet.

Question 11

The debits and credits of the adjusting entries are then placed on the….

Answer 11

“Adjustments” column of the worksheet.

Question 12

Amounts in the “Unadjusted trial balance” and “Adjustments” columns are combined to come up with the ________ __________ of the accounts.

Answer 12

adjusted balances

Question 13

Debit and Debit means

Answer 13

add

Question 14

Credit and Credit means

Answer 14

add

Question 15

Debit and credit

Answer 15

subtract

Question 16

The procedure to compute the adjusted balances of accounts in the
adjusted trial balance

Answer 16

“cross footing”

Question 17

The procedure to compute for the “totals” of the columns

Answer 17

“footing”

Question 18

The two lines underneath an amount

Answer 18

“double rule”

Question 19

These are the means by which the information accumulated and process in financial accounting is periodically communicated to the users.

Answer 19

Financial statements

Question 20

It shows information on assets, liabilities and equity.

Answer 20

Statement of Financial Position (Balance Sheet)

Question 21

It shows information on income and expenses, and consequently, the profit or loss for the period.

Answer 21

Statement of Comprehensive Income (Income Statement)