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Question 1: When a work sheet is prepared at year-end:
Option A. Revenue and expense accounts do not have to be closed to the income summary account because the income statement is prepared from the work sheet and net income is already computed.
Option B. Adjusting entries must be journalized and posted, even though the adjustments column is properly completed.
Option C. The amount of net income appears as a credit in the income statement column of the worksheet when revenue exceeds total expenses.
Option D. The income statement columns and balance sheet columns of the work sheet eliminate the need to prepare formal financial statements.
Financial Statement Analysis and Preparation
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