Financial Statements and Worksheets

The video tutorial explains how business transactions affect financial records, emphasizing the principle of equal debits and credits. It introduces the 10 column worksheet, detailing how trial balances are derived from the general ledger. Adjustments for items like prepayments are discussed, followed by the calculation of gross and net profit. The tutorial concludes with the preparation of a balance sheet, integrating net profit into equity.

What is the fundamental principle that ensures every transaction in business impacts financial records?

• Every transaction is recorded in a journal.

• Every transaction is recorded in cash.

• Every transaction is recorded twice.

• Every credit has a corresponding debit.

What does the trial balance list in a 10-column worksheet?

• All credit transactions

• All transactions of the business

• All general ledger accounts

• All cash transactions

What is the purpose of the trial balance in financial statements?

• To list all cash transactions

• To list all general ledger accounts

• To list all profit and loss accounts

• To list all credit transactions

Which of the following is an example of an adjustment made in columns 3 and 4?

• Net profit

• Closing stock

• Opening balance

• Gross profit

Which of the following is NOT a possible adjustment in columns 3 and 4?

• Prepayments

• Accrued expenses

• Closing stock

• Opening balance

What is calculated using the net of columns 5 and 6 in the 10-column worksheet?

• Gross profit

• Net profit

• Trial balance

• Equity

How is the gross profit carried over in the 10-column worksheet?

• From columns 7 and 8 to columns 9 and 10

• From columns 3 and 4 to columns 5 and 6

• From columns 5 and 6 to columns 7 and 8

• From columns 1 and 2 to columns 3 and 4

Which columns are used to calculate the net profit in the 10-column worksheet?

• Columns 7 and 8

• Columns 5 and 6

• Columns 3 and 4

• Columns 1 and 2

What is added to the equity section of the balance sheet?

• Trial balance

• Net profit

• Gross profit

• Adjustments

What is the result of deducting all operating expenses from the gross profit?

• Net profit

• Gross profit

• Trial balance

• Equity