Question

In preparing closing entries, which of the following columns of the worksheet are the most helpful?

a) Adjusted Trial Balance
b) Unadjusted Trial Balance
c) Income Statement
d) Balance Sheet

Answer 1

When preparing closing entries, the Income Statement and Adjusted Trial Balance columns of the worksheet are most helpful as they contain the necessary account balances that need to be closed to the capital account to reset temporary accounts for a new period.

Step-by-step explanation:

In preparing closing entries, the most helpful column of the worksheet is the Income Statement column. This column contains all the revenue and expense account balances that need to be closed to the capital account for the company to start a new accounting period with a zero balance in these temporary accounts.

The Adjusted Trial Balance column is also helpful as it provides the final balances for all accounts after adjustments have been made, ensuring that any closing entries reflect the correct amounts to be closed out.