Chapter 4, Problem 4.31AP

1

:

To determine

Worksheet

A worksheet is a spreadsheet used while preparing a financial statement. It is a type of form having multiple columns and it is used in the adjustment process. The use of a worksheet is optional for any organization. A worksheet can neither be considered as a journal nor a part of the general ledger.

Financial statement

A financial statement is the complete record of financial transactions that take place in a company at a particular point of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. It helps them to know the exact financial position of the company. There are four basic financial statements; they are:

• Balance Sheet
• Income statement
• Statement of retained earnings
• Statement of cash flows

Closing Entries: Closing entries are recorded in order to close the temporary accounts such as incomes and expenses by transferring them to the permanent accounts such as retained earnings. It is passed at the end of the accounting period, to transfer the final balance.

To Prepare: A worksheet for Company FID at December 31, 2018.

2

To determine

To Prepare: An income statement,for the year ended December 31, 2018.

3

To determine

To Prepare: The closing entries.