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

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Presentation on theme: "Worksheet for a Merchandising Business Presented by: Audrey Marshall For Accounting Principles Presented by: Audrey Marshall For Accounting Principles."— Presentation transcript:

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

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 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 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 1 st Day of Month End on LAST day of the month IRS must approve The length of time for which a business summarizes and reports financial information AKA—Accounting Period Begin on any date Usually Begin 1 st 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 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 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 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 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 Balance of Supplies Supplies on hand (value of supplies) Supplies Used

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 Purchase recorded as a Debit Insurance decreases in value daily Impractical to record decrease daily Always given VALUE of Prepaid insurance Balance of Prepaid Insurance Value (remaining unused insurance)1, Insurance Coverage Used100.00

11 Income Statement Balances of: Revenues Accounts Expense Accounts Determines: Net Income R>E Net Loss RE Net Loss R

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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