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Chapter 3: Q 21RQ (page 157)

What is a worksheet, and how is it used to help prepare an adjusted trial balance?

Short Answer

Expert verified

Worksheet is doscument prepared internally that summarize the data which assist in preparing the financial statements. It summarizes the accounts of the business and adjustments are recorded in the worksheet, which helps in preparing adjusted trial balance.

Step by step solution

01

Step-by-Step SolutionStep 1: Explanation on Adjusted Trial Balance

It is prepared after the journalizing and posting of adjusting entries in the books of accounts.

02

Sections of Worksheet

Worksheet is divided into four sections such as account names, unadjusted trial balance, adjustments and adjusted trial balance.

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Most popular questions from this chapter

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Question :At the beginning of the year, Modish Advertising owed customers \(2,100 for unearned revenue collected in advance. During the year, Modish received advance cash receipts of \)6,100 and earned \(20,000 of service revenue (exclusive of any amount earned from advance payments). At year-end, the liability for unearned revenue is \)3,100 and unadjusted service revenue is $20,000. Requirements 1. Record the adjusting entry assuming that Modish records the cash receipt of unearned revenue by initially crediting a liability account. Post the adjusting entry to the Unearned Revenue and Service Revenue T-accounts. Make sure to include the beginning balance and additional unearned revenue in the Unearned Revenue T-account. 2. Record the adjusting entry assuming that Modish records the cash receipt of unearned revenue by initially crediting a revenue account. Post the adjusting entry to the Unearned Revenue and Service Revenue T-accounts. Make sure to include the beginning balance in the Unearned Revenue T-account and the additional unearned revenue in the Service Revenue T-account. 3. Compare the ending balances of the T-accounts under both approaches. Are they the same?
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