Question

Critical Thinking EA3-C1 Discuss Benefits of Using Relative Cell References Many accounting-related worksheets require the same formula to be used in multiple locations. While certain worksheets, such as those containing a financial statement, are relatively small, others can extend for thousands of rows. As you learned, the Copy and Paste commands and the AutoFill option can be used to efficiently copy a formula from one location to another. Identify four types of accounting-related worksheets (aside from the financial statements) for which the use of relative cell references within formulas would yield a significant benefit. Write a paragraph of at least six sentences to discuss the structure of the worksheets and why the use of relative cell references would be beneficial.

Answer 1

Four types of accounting related worksheets

1. Fixed Assets Report - A summary of the detailed Fixed assets report requires the use of formulas. To summarize the asset details in asset categories (like Buildings, machinery, furniture, IT Software etc.) SUMIF function is used. It can easily be copied and pasted to different rows instead of applying it one by one (if used correctly).

2. Ageing Report - In a debtor or creditor ageing report IF + AND function can be used to calculate the ageing manually. It can be applied in the top row once and then can be copied to all other rows to find the correct ageing. The copy and paste function will use the relative cell reference for calculating ageing.

3. Borrowing schedule - Borrowing repayment schedules can be easily made with the relative cell reference and copy paste function. In the top row (the first year of borrowing, the formula can be entered and then relative cell reference would do the magic.

4. Lease schedules - Relative cell reference would be very beneficial in case of lease workings in order to calculate various balances like MLP, present value etc.

Well, in order to get the benefits of the relative cell reference, the structure of sheets must be same. If the structure of sheets is different, relative cell reference would not yield desired results.