Chaptyer 3 adjusting and worksheet
Professor Harmer explains how the worksheet is used by CPA firms when clients bring their company's financials in for tax returns to be done. The worksheet is a tool used for numerous purposes. In our class we are using it for adjusting the unadjusted trial balance for unrecorded transactions and changes that have happened during the current accounting period. These adjustments are 'internal adjustments' done by us the accountant. 'External' transactions happen with outside third parties like customers and suppliers and retailers. There is always supporting documentation for external transactions like bills and receipts. Internal transactions are supported by the accountant's workpapers and calculations determining what the adjustment is.