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Worksheet for a Merchandising Business

Chapter 15. Worksheet for a Merchandising Business. Presented by: Audrey Marshall For Accounting Principles. Chapter Overview. Financial Information Using a Worksheet for a Merchandising Business Recording Payroll Recording Employer Payroll Taxes

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Worksheet for a Merchandising Business

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  1. Chapter 15 Worksheet for a Merchandising Business Presented by: Audrey Marshall For Accounting Principles

  2. Chapter Overview • Financial Information • Using a Worksheet for a Merchandising Business • Recording Payroll • Recording Employer Payroll Taxes • Reporting Withholding and Payroll Taxes • Paying Withholding and Payroll Taxes

  3. Merchandising Business Worksheet • Used by management to make decisions about future business operations • Shows profit or loss • Helps determine need for future changes in business decisions • Summarizes information needed to prepare tax reports

  4. Fiscal Periods • The length of time for which a business summarizes and reports financial information • AKA—Accounting Period • Begin on any date • Usually Begin 1st Day of Month • End on LAST day of the month • IRS must approve Accounting Concept: Accounting Period Cycle

  5. Work Sheet • Columnar accounting form used to summarize the GL information needed to prepare financial statements. • Uses: • Summarize GL balances • Prove equality of Cr. & Dr. • Plan needed changes to update GL balances • To calculate Net income/loss

  6. Preparing a Work Sheet • Heading • Trial Balance • Adjustments • Reflects changes to assets • Income Statement • Shows Revenue and Expenses • Balance Sheet • Calculate

  7. Trial Balance • Proof of the equality of DR & CR • Information obtained from GL • List ALL accounts

  8. Adjustments • Definition: • Changes recorded on a work sheet to update GL Accounts at the end of the fiscal period. • Supplies & Prepaid Insurance • Bring Accounts Up-to-Date • Accurate Record Assets • Value of supplies bought • Value of remaining insurance policy

  9. Adjustments-Supplies • Purchase recorded as a Debit • Supplies decrease in value daily • Impractical to record decrease daily • Always given Supplies on Hand

  10. Adjustments-Prepaid Ins. • Purchase recorded as a Debit • Insurance decreases in value daily • Impractical to record decrease daily • Always given VALUE of Prepaid insurance

  11. Balances of: Revenues Accounts Expense Accounts Determines: Net Income R>E Net Loss R<E Totals will not equal Income Statement

  12. Balance Sheet • Final Step in preparing the WS • Extend permanent account balances • Add net income/loss • Re-total

  13. Questions or WYL Quiz?

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