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Mastering Accounting: Work Sheet Essentials

Learn about work sheets, trial balances, adjustments, and preparing financial statements in accounting for service businesses. Understand fiscal periods and the importance of accuracy in financial reporting.

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Mastering Accounting: Work Sheet Essentials

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  1. Accounting I Chapter 7 – Work Sheet for a Service Business

  2. TERMS REVIEW fiscal period work sheet trial balance Lesson 7-1, page 158

  3. TERMS REVIEW Fiscal Period The length of time for which a business summarizes and reports financial information. Lesson 7-1, page 156

  4. TERMS REVIEW Work Sheet A columnar accounting form used to summarize the general ledger information needed to prepare financial statements. Lesson 7-1, page 156

  5. TERMS REVIEW Trial Balance A proof of the equality of debits and credit is a general ledger. Lesson 7-1, page 157

  6. PREPARING THE HEADING OF A WORK SHEET 1 2 3 1. Name of Company 2. Name of Report 3. Date of Report Lesson 7-1, page 156

  7. PREPARING A TRIAL BALANCE ON A WORK SHEET 2 1. Account Titles 1 2. Account Balances 3. Single Rule 4. Add Totals 5. Write Totals 6. Double Rule 3 4 & 5 6 Lesson 7-1, page 157

  8. Work Together & On Your Own – Page 158-159

  9. TERMS REVIEW adjustments Lesson 7-2, page 164

  10. TERMS REVIEW Adjustments Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period. Lesson 7-2, page 160

  11. 3 SUPPLIES ADJUSTMENT ON A WORK SHEET 2 1 1. Write the debit amount. 2. Write the credit amount. 3. Label the two parts of this adjustment with a small letter a in parentheses, (a). Lesson 7-2, page 161

  12. 3 PREPAID INSURANCE ADJUSTMENT ON A WORK SHEET 2 1 1. Write the debit amount. 2. Write the credit amount. 3. Label the two parts of this adjustment with a small letter b in parentheses, (b). Lesson 7-2, page 162

  13. 3 PROVING THE ADJUSTMENTS COLUMNS OF A WORK SHEET 1. Rule a single line. 2. Add both the Adjustments Debit and Credit columns. 3. Rule double lines. 1 2 Lesson 7-2, page 163

  14. Work Together & On Your Own – Page 164

  15. TERMS REVIEW income statement net income net loss Lesson 7-3, page 169

  16. TERMS REVIEW Income Statement A financial statement showing the revenue and expenses for a fiscal period. Lesson 7-3, page 166

  17. TERMS REVIEW Net Income The difference between total revenue and total expenses when total revenue is greater. Lesson 7-3, page 167

  18. 1 2 3 EXTENDING BALANCE SHEET ACCOUNT BALANCES ON A WORK SHEET 1. Debit Balances without Adjustments 2. Debit Balances with Adjustments 3. Credit Balances without Adjustments Lesson 7-3, page 165

  19. 2 3 EXTENDING INCOME STATEMENT ACCOUNT BALANCES ON A WORK SHEET 1 1. Sales Balance 2. Expense Balances without Adjustments 3. Expense Balances with Adjustments Lesson 7-3, page 166

  20. 1 2 4 5 7 3 6 RECORDING NET INCOME, AND TOTALING AND RULING A WORK SHEET 1. Single Rule 2. Total 3. Net Income 4. Extend Net Income 5. Single Rule 6. Totals 7. Double Rule Lesson 7-3, page 167

  21. 1 3 2 4 CALCULATING AND RECORDING A NET LOSS ON A WORK SHEET 1. Single Rule 2. Totals 3. Net Loss 4. Extend Net Loss Lesson 7-3, page 168

  22. Work Together & On Your Own – Page 169

  23. CHECKING FOR TYPICAL CALCULATION ERRORS • When two column totals are not in balance, subtract the smaller total from the larger total to find the difference. • Check the difference between the two amounts against the following guides. 1. The difference is 1, such as $.01, $.10, $1.00, or $10.00. 2. The difference can be divided evenly by 2. 3. The difference can be divided evenly by 9. 4. The difference is an omitted amount. Lesson 7-4, page 170

  24. CHECKING FOR ERRORS IN THE WORK SHEET • Check for Errors in the Trial Balance Column • Have all general ledger account balances been copies in the Trial Balance column correctly? • Have all general ledger account balances been recorded in the correct Trial Balance column? • Check for Errors in the Adjustments Columns • Do the debits equal the credits for each adjustment? • Is the amount for each adjustment correct? • Check for Errors in Income Statement and Balance Sheet Columns • Has each amount been copied correctly? • Has each amount been extended to the correct column? • Has the net income/loss been calculated correctly? • Has the net income/loss been recorded in the correct column? Lesson 7-4, page 171

  25. Work Together & On Your Own – Page 173

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