RSM220H1 Study Guide - Deferral, Debits And Credits, Fixed Asset
20 Apr 2012
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Document Summary
A worksheet is used to assist the accountant in the preparation of the financial statement. It is used to organize the data for the financial statements. The worksheet provides the overall picture of the accounting process and so helps to eliminate errors. It is not a formal statement but it"s the accountants working papers or rough copy. The six column worksheet has the column, account titles, trial balance, incomes. The matching principal states that the revenue of a specific time period should be matched against expenses incurred in that same time period. Due to this, we have to adjust our records so that our balances for that time period are correct as well as our financial statements. Expense payments made ahead of time are called prepaid expenses and are classified as current assets, e. g. rent, insurance, supplies. When they are used up, the asset account will decrease and will now become an expense.
