Worksheet Preparation (Essay Sample)

Worksheet Preparation
Name
Institutional Affiliation
12/10/2014.
Discuss the benefits of the worksheet.
A worksheet can be referred to as an array of accounting data that accountants use to record information (Edward, K. 2006).The benefits of preparing a worksheet include:
* Reduces chance of forgetting an adjustment.
Worksheets are used by accountants as a tool to take into account every transaction including periodic adjustments that occur when transactions are done. Adjustments to the closed accounts in a structure manner following a certain format are well incorporated in the worksheet.
* Accuracy.
Preparing accounts by use of worksheet solves perennial problems of inaccuracy in data to prevent erroneous financial reporting. The worksheet does this by revealing arithmetic errors in the entry of the data.
* Ensures formality in preparation of accounting records.
Before the preparation of the worksheet, an adjusted trial balance has to be prepared. Basically, the formal steps have to be followed in order to complete the accounting cycle before finally preparing the preparation of a worksheet.
* Regular compliance
A financial spreadsheet enables organizations to prepare and report operating data that conforms to specific regulatory guidelines (Claudia, G. & Mark, W. L. 2008).The worksheet is used to include essential information of the current accounting legislation which must be complied with by the company.
Explain how the financial reports are prepared from the worksheet.
Before a worksheet is prepared, the full accounting cycle has to be completed (Richard, E. 1996). Basically, the accounting cycle goes the following processes:
WorksheetBooks of final entryTrial balanceBusiness transactionsBooks of original entry
The preparation of a worksheet is usually the last step. When preparing a worksheet, the following steps have to be followed;
Trial BalanceAdjustmentsAdjusted trial balanceFinancial statements.Worksheet
A worksheet is usually introduced by:
1 Name of the company
2 The title worksheet
3 Time of accounting period covered.
Step in preparing a worksheet.
Step 1:
* Insertion of account balances in the trial balance columns.
This involves posting the balances from the trial balance the worksheet.
A typical Worksheet example resembles as follows:
XYZ COMPANY
WORKSHEET TO PREPARE FINANCIAL STATEMENTS
DECEMBER 31, 2005
Account Title

Trial Balance

Adjustments

Adjusted Trial Balance

Income Statement

Balance Sheet.


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Step 2:
* Entering adjustments in the adjustment columns.
Adjustments may include depreciation, accrued rent/salaries, interest charges, unearned revenue etcetera.
Step 3:
* Entering the account balances in the adjusted trial balance columns.
This is the totaling of the pair of adjustment...