What is the purpose of a worksheet in accounting?

• A. A form used to pull together all information needed to enter adjusting entries and prepare financial statements.
• B. A summary of cash receipts and disbursements.
• C. A statement of owner's equity.
• D. A detailed ledger of accounts.

Answer: (A)

A worksheet is an internal organizing tool used after assembling the trial balance to bring together all information needed to enter adjusting entries and to prepare the financial statements. It collects the current balances, shows proposed adjustments (such as accruals, deferrals, depreciation), and then produces an adjusted trial balance. From that, you can draft the figures for the income statement and balance sheet, ensuring that totals remain in balance before posting to the general ledger. It’s different from a cash receipts/disbursements summary, a statement of owner’s equity, or a detailed ledger, all of which serve distinct purposes; the worksheet’s role is to coordinate adjustments and provide a clear path to accurate financial statements.