1. Worksheets are required in every companys accounting cycle. Agree or disagree and explain why.

2. What is the purpose of adjusting accounts?

3. What is the relationship of internal transactions to the adjusting process?

4. Explain how an adjustment can affect both the income statement and balance sheet. Please give an example.

5. Why do we need the Accumulated Depreciation account?

6. Depreciation expense goes on the balance sheet. True or false? Why?

7. Each month the cost of accumulated depreciation grows while the cost of equipment goes up. Agree or disagree. Defend your position.

8. Define accrued salaries.

9. Why dont the formal financial statements contain debit or credit columns?

10. Explain how the financial statements are prepared from the worksheet.

11. Janet Fox, President of Angel Co., went to a tax seminar. One of the speakers at the seminar advised the audience to put off showing expenses until next year because doing so would allow them to take advantage of a new tax law. When Janet returned to the office, she called in her accountant, Frieda ORiley. She told Frieda to forget about making any adjustments for salaries in the old year so more expenses could be shown in the new year. Frieda told her that putting off these expenses would not follow generally accepted accounting principles. Janet said she should do it anyway. You make the call. Write your specific recommendations to Frieda