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Work Sheets and Financial Statements

6 May, 2015 - 17:39

The work sheet is a collection of important data that is used to determine which adjusting entries must be performed. It also assists in the preparation of financial statements. The first step of preparing a work sheet is the trial balance. Once a trial balance proves (i.e. total debits equal total credits), adjusting entries can be performed. To make certain all debits and credits still prove after all adjusting entries, an adjusted trial balance is created. Once the adjusted trial balance proves, if is separated into an income statement and a balance sheet. All columns of the work sheet should have equal balances for debits and credits.