Question

2. To prepare the income statement all necessary numbers can be found in the income statement columns of the work sheet, including the profit or loss.

* True False

4. Internal documents prepared by accountants when organizing the information presented in formal reports to internal and external decision makers are called: *

Adjusting papers

Statement papers

Working papers

Closing papers

Business papers

Answer 1

Answer to both the questions with detailed explanation is given below.

3. Correct Answer - True

Explanation - In accounting, generally there are 10- column worksheets with 5 headings .Each heading has two columns for debit and credit. Those five headings include:

i) Trial Balance - It contains the unadjusted balances of all accounts.

ii) Adjustments to be made

iii) Adjusted Trial Balance - It contains the both adjusted and unadjusted amounts.

iv) Income Statement - It contains adjsuted balances of revenue, gains, expenses and losses. It debit balance exceeds credit balance, it shows net loss. It credit balance exceeds debit balance, it shows net profit.

v) Balance Sheet - It represents financial position of an entity. It contains adjusted balances of assets , liabilities and owner's equity.

4. Correct Answer - Working Papers

Explanation : Working papers are also termed as informational reports that are used by accounting professional or accountants to prepare financial statements. These are basically supporting documents for preparing financial statements.

So, the correct ootion is working papers.