Textbook Problem

Why do some accountants prepare an end-of-period spreadsheet?

To determine

Explain the reasons behind the preparation of an end-of-period spreadsheet by some accountants.

Explanation of Solution

Spreadsheet: A spreadsheet is a worksheet. It is used while preparing a financial statement. It is a type of form having multiple columns and it is used in the adjustment process. The use of a worksheet is optional for any organization. A worksheet can neither be considered as a journal nor a part of the general ledger.

First, a worksheet records the account balances transferred from the adjusted trial balance that are required to prepare the financial statements for the particular year. In the income statement, it records the expenses account balances in the debit column and revenues account balances in the credit column. Similarly, it records assets in the debit column and liability and equity accounts in the credit column.

Accountant generally uses spreadsheet to understand the impact of adjustments on the financial statements. Spreadsheet illustrates the flow of accounting information from the unadjusted trial balance into the adjusted trial balance and into the financial statements. According to the above explained reasons, some accountant prepares spreadsheet at the end-of-the period.