When a Worksheet Is Used

question 33

Multiple Choice

When a worksheet is used:

• A) Adjusting entries are not prepared, since adjustments are shown on the worksheet.
• B) Revenue and expense accounts do not have to be closed to the Income Summary account, because the income statement is prepared from the worksheet and profit is already computed.
• C) Financial statements may be prepared before recording adjusting and closing entries in the accounting records.
• D) The Income Statement column and Balance Sheet column of the worksheet eliminate the need to prepare formal financial statements for a business.

---

Definitions:

Discount Factor(s)

A multiplier for determining the present value of future cash flows or investments.

Pretax Return

The profit a company generates before taxes are taken into account, often expressed as a percentage of sales or investment.

Salvage Value

The forecasted selling price for an asset at the end of its operational life.

Discount Rate

The financial rate implicated in translating future cash flows into their present value during discounted cash flow analysis.