Question

1. Why are adjustments needed on the worksheet?

2. Why do you adjust for supplies used? 3. What is depreciation? Why does it need to be adjusted?

4. Why is a worksheet useful in preparing the financial statements?

5. Why do you create a journal for adjusting entries?

6.What do you think happens to financial statements if this entry is not completed. 7. Do you think companies could get into trouble by not recognizing prepaid expenses?

Answer each question in 100 plus words

Answer 1

1) the main purpose of a worksheet is that it reduces the likelyhood of forgetting an adjustment and it reveals arithmetic errors. a worksheet acts as a tool for an accountant and it is not usually intend to be used by third parties. it is an informal document.

a typical worksheet consist of a coloumn on the left showing main account titles and 10 more columns of debits and credits showing trial balance, adjustments, adjusted trial balance, income statement and balancesheet

2) this is the amount your supplies acount should reflect after the adjusting entry.. balance the entry by crediting your supplies accounts for example, if you usrd $220 in supplies, debit the supplies expense for $220 and credit the supplies for equal amount.

3) depriciation is a reduction in the value of an asset over time, due in a particular to wear and tear

need to be adjusted:- when a fixed asset is acquired by a company, it is recorded at cost(generally, cost is equal to the purchase price of asset) this cost is recognised as an asset and not expense

4) worlsheets are prepared at the end of an accounting period and usually include a list of accounts, accpunt balamces, adjustments to each account, and each account's adjusted balamce all sorted in financial statement order. as you can imagine ahetr a worksheet is completely filled out, preparing financial statements manually is quite simple. most of the preparation work goes into drafting the worksheets.

5) the purpose of adjusting entties is to adjust revenues and expenses to the accounting period in which they occured.. the purpose of adjusting entries is to show when the money changed hands and to convert your real-time entries to entries that reflect your accrual accounting system.