5.1 The Worksheet

Question 1

A worksheet

Answer 1

is an informal business paper, used to organize and plan the information for the financial statements

It uses control accounts (only one A/R and A/P)

Question 2

Steps in Preparing a WorkSheet

Answer 2

1. Write in the heading.
2. Enter all accounts with their balances in the first two columns. ENSURE it is BALANCED before you continue
3. Extend each of the amounts from the trial balance columns into the income statement and balance sheet accounts
4. Balance the worksheet

Question 3

Net income or loss

Answer 3

If credit column (revenues) is greater than debit column (expenses) = net income!

Question 4

If a net loss

Answer 4

IF net loss occurs, the amount is placed in the opposite columns