Question

Explain the purpose of the Worksheet and describe four tips for finding errors on the worksheet.

Answer 1

Worksheet:

worksheet is nothing but a three coloumn form which is used for preparing financial statements and also adjustments.

Purpose of a worksheet:
1.where volume of data is much more in big organisations,error remains while adjusting entries if sheets are not prepared.
2.its helpful to make some changes before preparation of financial statements
3.preparation of financial statements without errors becomes complicated these days.
4.For checking out of Arthmetical accuracy
5.it is prepared before preparation of financial statements.

Tips for finding errors in Financial satements:
(a).Errors in Journal
Checking of sum of all debit coloumns must equal to sum of all credit coloumns

(B)Errors while proving cash:
when checkbook balance at the end of the month is eual to cash on hand at end.

(c).Arthimetic errors:
totals have to be in balance.if not error might have occured.so recheck have to be gone through

(D)Financial satements:
it includes income statement and balance sheet.have to get checked weather decimal points are placed in correct positions.mathematical operations have to be performed.
a.Assest side have to be equal to the liabulities side
b.net income or loss must be same as worksheet.