It is not necessary to prepare formal financial statements if a worksheet has been prepared because financial position and net income are shown on the worksheet.

Question

Quizplus · Accepted Answer

A worksheet is a tool used to organize financial information and make adjusting entries, but it does not replace formal financial statements. The worksheet provides a preview of the financial statements, but the actual financial statements (such as the income statement, balance sheet, and statement of cash flows) are necessary for presenting financial information to external parties, such as investors and creditors.

It Is Not Necessary to Prepare Formal Financial Statements If