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Chapter 3: Q19Q (page 128)

鈥淎 worksheet is a permanent accounting record, and its use is required in the accounting cycle. 鈥淒o you agree? Explain.

Short Answer

Expert verified

Disagree because it鈥檚 a worksheet and it assists in making adjusting entries and for closing the books at the end of the accounting period. The accounting statements are considered the permanent records, but this is not the case with the worksheet.

Step by step solution

01

Meaning of worksheet

Worksheet is a document used in the accounting department for inspecting and modelling the balances of accounts. It is beneficial for assuring that the accounting entries are obtained accurately.

02

Explanation for the statement

The statement is incorrect because a worksheet is not a permanent accounting record and its use is not needed in the accounting cycle. The worksheet is not a formal method for collecting and resolving information required for accounting statements. It is used alternatively as its aids in preparing financial statements.

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Most popular questions from this chapter

(LO2,3) Dresser Company鈥檚 weekly payroll, paid on Fridays, totals \(8,000. Employees work 5-days week. Prepare Dresser鈥檚 adjusting entry on Wednesday, December 31, and the journal entry to record the \)8,000 cash payment on Friday, January 2.

Santo Design was founded by Thomas Grant in January 2011. Presented below is the adjusted trial balance as of December 31, 2017.

SANTO DESIGN

ADJUSTED TRIAL BALANCE

DECEMBER 31, 2017


Dr.

Cr.

Cash

\( 11,350

Accounts Receivable

21,500

Supplies

5,000

Prepaid Insurance

2,500

Equipment

60,000

Accumulated Depreciation鈥擡quipment

\) 35,000

Accounts Payable

5,000

Interest Payable

150

Notes Payable

5,000

Unearned Service Revenue

5,600

Salaries and Wages Payable

1,300

Common Stock

10,000

Retained Earnings

3,500

Service Revenue

61,500

Salaries and Wages Expense

11,300

Insurance Expense

850

Interest Expense

150

Depreciation Expense

7,000

Supplies Expense

3,400

Rent Expense

4,000

\(127,050

\)127,050

Instructions

a. Prepare an income statement and a statement of retained earnings for the year ending December 31, 2017, and an unclassified balance sheet at December 31.

b. Answer the following questions.

1.If the note has been outstanding for 6 months, what is the annual interest rate on that note?

2.If the company paid $17,500 in salaries in 2017, what was the balance in Salaries and Wages Payable on December 31, 2016?

(LO5) (Closing Entries) Presented below is information related to Gonzales Corporation for the month of January 2017.

Cost of Goods sold \( 208,000 Salaries and wages expenses \)61,000

Delivery expenses \( 7,000 Sales discounts \) 8,000

Insurance expenses \( 12,000 Sales returns and allowances \)13,000

Rent expenses \( 20,000 Sales revenue \)350,000

Instructions:

Prepare the necessary closing entries.

The purpose of presenting comparative information in the

transition to IFRS is:

(a) to ensure that the information is a faithful representation.

(b) to be in accordance with the Sarbanes-Oxley Act.

(c) to provide users of the financial statements with information on GAAP in one period and IFRS in theother period.

(d) to provide users of the financial statements withinformation on IFRS for at least two periods.

E3-3 (L02) (Corrected Trial Balance) The following trial balance of Blues Traveler Corporation does not balance.

BLUES TRAVELER CORPORATION

TRIAL BALANCE

APRIL 30, 2017
Debit Credit

Cash \( 5,912Accounts Receivable 5,240Supplies 2,967Equipment 6,100Accounts Payable \) 7,044Common Stock 8,000Retained Earnings 2,000Service Revenue 5,200Office Expense 4,320

Total \(24,539 \)22,244

An examination of the ledger shows these errors.1. Cash received from a customer on account was recorded (both debit and credit) as \(1,380 instead of \)1,830.2. The purchase on account of a computer costing \(3,200 was recorded as a debit to Office Expense and a credit to AccountsPayable.3. Services were performed on account for a client, \)2,250, for which Accounts Receivable was debited \(2,250 and ServiceRevenue was credited \)225.4. A payment of \(95 for telephone charges was entered as a debit to Office Expense and a debit to Cash.5. The Service Revenue account was totaled at \)5,200 instead of $5,280.InstructionsFrom this information prepare a corrected trial balance.
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