Totaling and ruling the Adjustments columns are necessary to prove equality of debits and credits in the ledger, a fundamental accounting principle. While it helps in the overall accuracy and preparation of financial statements, it's not specifically for verifying expenses, calculating net income, or identifying calculation errors.
Why is totaling and ruling the Adjustments columns of a work sheet necessary? One of the primary reasons is to prove equality of debits and credits in the ledger accounts, which supports the fundamental accounting principle that for a balanced set of books, debits must equal credits. This process is crucial for ensuring the accuracy of the data before preparing financial statements.
Moreover, totaling the Adjustments column does not directly verify total expenses but instead ensures that all adjustments made to income and expenses are correctly and completely recorded. Calculating net income may involve working with these adjustments, but it is not the main reason for totaling and ruling them. As for identifying errors in calculations, while important, it is not the specific purpose of this step in the worksheet process.