When a worksheet is used:

Question

Quizplus · Accepted Answer

When a worksheet is used, financial statements may be prepared before adjusting and closing entries are recorded in the accounting records. The worksheet is an internal document that helps with the preparation of financial statements and the recording of adjusting and closing entries. However, the formal financial statements still need to be prepared and the necessary adjusting and closing entries must be recorded in the accounting records to accurately reflect a company's financial position and performance. Choices A, B, and D are incorrect because adjusting entries still need to be prepared, revenue and expense accounts still need to be closed to the Income Summary account, and formal financial statements still need to be prepared even with the use of a worksheet.

When a Worksheet Is Used