Which of the following best describes the purpose of a journal entry worksheet in the accounting process?

• A. To summarize all account balances at the end of an accounting period.
• B. To calculate the company's net income for the period.
• C. To record and organize the effects of business transactions by listing debits and credits before posting to the general ledger.
• D. To prepare financial statements for external users.

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the role of a journal entry worksheet in the accounting process. A journal entry worksheet is used to record and organize the effects of business transactions systematically.
2. Step 2: Recognize that the worksheet lists debits and credits for each transaction. This ensures that the accounting equation (Assets = Liabilities + Equity) remains balanced.
3. Step 3: Note that the journal entry worksheet serves as a preliminary step before posting transactions to the general ledger, which is the main record of all accounts.
4. Step 4: Differentiate the purpose of the journal entry worksheet from other accounting tools, such as trial balances (used to summarize account balances) or income statements (used to calculate net income).
5. Step 5: Conclude that the primary purpose of the journal entry worksheet is to organize and record transactions, ensuring accuracy and completeness before they are posted to the general ledger.