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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Accounting Concepts Page 152: two new Accounting Concepts: Business Entity – keep business.

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Presentation on theme: "CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Accounting Concepts Page 152: two new Accounting Concepts: Business Entity – keep business."— Presentation transcript:

1 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Accounting Concepts Page 152: two new Accounting Concepts: Business Entity – keep business separate from personal records. Objective Evidence – documents required to prove that a transaction actually happened (source documents) 1 LESSON 6-1

2 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Accounting Cycle Journal – everything is recorded; permanent record Ledger – information taken from the journal and recorded for individual accounts; permanent record Worksheets – Columnar accounting forms used to summarize general ledger information needed to prepare financial statements – Prepared for 4 reasons: Summarize ledger and make sure debits equals credits Plan needed changes to bring accounting balances up to date Separate general ledger account balances according to financial statements to be prepared Calculate the amount of net income or net loss during a fiscal period Not a permanent record and make be completed in pencil 2 LESSON 6-1

3 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 6-1 Creating a Worksheet

4 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 6-1 PREPARING THE HEADING OF A WORK SHEET page 153 Name of Company 1 Name of Report 2 Date of Report 3 Fiscal period – length of time for which a business summarizes and reports financial information

5 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON Write the general ledger account titles; same order as chart of accounts 2.Write the general ledger debit account balances. Write the general ledger credit account balances. 4.Add both the Trial Balance Debit and Credit columns. 3.Rule a single line across the two Trial Balance columns. 5.Write each column’s total below the single line. 6.Rule double lines across both Trial Balance columns. PREPARING A TRIAL BALANCE ON A WORK SHEET – proof of equality of debits and credits in general ledger page

6 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 6-1 TERMS REVIEW fiscal period work sheet trial balance page 155


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