1. LESSON 6-1
4/17/2017
Creating a Worksheet
Consistent Reporting – the same accounting procedures are followed in the same way in each accounting period.
Fiscal Period – length of time for which a business summarizes and reports financial information (1 yr, 3 months etc.)
Accounting Period Cycle – applied when changes in financial information are reported for a specific period of time in the form of financial statements.
Worksheet – columnar accounting form used to summarize the gen. ledger needed to prepare Financial Statements.
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2. PREPARING THE HEADING OF A WORK SHEET
page 153
Name of Company 1
Name of Report 2
Date of Report 3
LESSON 6-1

3. TRIAL BALANCE - A proof of the equality of debits and credits in a general ledger2
1. Write the general ledger account titles.
2. Write the general ledger debit account balances. Write the general ledger credit account balances. 1 4
3. Rule a single line across the two Trial Balance columns.
4. Add both the Trial Balance Debit and Credit columns.
5. Write each column’s total below the single line. 3
6. Rule double lines across both Trial Balance columns. 5 6
LESSON 6-1

4. TERMS REVIEW
page 155
Trial Balance –
LESSON 6-1

5. Do Now:
Take out 6.1 OYO
Why do we create a Trial Balance? Why is it important?
LESSON 6-2

6. Planning Adjustments on a Worksheet
LESSON 6-2
4/17/2017
Planning Adjustments on a Worksheet
Example: You purchase supplies in August.
You use some supplies throughout the month and some are left for September.
Only the value of the supplies used in August should be reported as expenses in August.
Changes must be made on the worksheet to account for those supplies used and to determine how much is left in the supplies account.
CONCEPT: Matching Expenses with Revenue
Amounts that helped earn revenue for a period must be reported as expenses in the same period.
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7. Adjustments – Changes recorded on a worksheet to update all general ledger accounts
Each time supplies are bought we debit the Supplies account.
Supplies on hand are items of value owned by a business until the supplies are used.
The value of supplies that are used becomes an expense to the business.
LESSON 6-2

8. Transaction: On August 31, Ms
Transaction: On August 31, Ms. Park counted the supplies on hand and found that the value of supplies still unused on that date was $
Beg. Balance 8/31: $1,025
Ending Balance 8/31 $310.00
1. Write the debit amount.
2. Write the credit amount.
3. Label the two parts of this adjustment.
LESSON 6-2

9. On August 31, Ms. Park checked the insurance records and found that the value of insurance coverage remaining was $1,100. The value of the insurance coverage used during the fiscal period is: 2 3 1
1. Write the debit amount.
2. Write the credit amount.
3. Label the two parts of this adjustment.
LESSON 6-2

10. PROVING THE ADJUSTMENTS COLUMNS OF A WORK SHEET
page 160 1 2 3
1. Rule a single line.
2. Add both the Adjustments Debit and Credit columns. Write each column’s total.
3. Rule double lines.
LESSON 6-2

11. PREPARING A WORK SHEET 1. Write the heading.
page 160 C
1. Write the heading.
2. Record the trial balance.
3. Record the supplies adjustment.
4. Record the prepaid insurance adjustment.
5. Prove the Adjustments columns.
6. Extend all balance sheet account balances.
7. Extend all income statement account balances.
8. Calculate and record the net income (or net loss).
9. Total and rule the Income Statement and Balance Sheet columns.
LESSON 6-2

12. LESSON 6-2

13. 1
LESSON 6-2

14. 1 2
496400
10000
15000
11000
10000
102500
120000
20000
5000
500000
62500
356500
21300
2800
30000
496400
10000
15000
31000
110000
20000
5000
500000
62500 6
(a) 71500 3
(b) 10000 4
11000
21300
2800
30000
356500
10000
71500 7 5
881500
881500
81500
81500
146600
356500
734900
525000
Net Income 8
209900
209900 9
356500
356500
734900
734900
LESSON 6-2

15. TERM REVIEW
page 161
adjustments
LESSON 6-2

16. LESSON 6-3 Extending Financial Statement Information on a Work Sheet
4/17/2017
LESSON 6-3 Extending Financial Statement Information on a Work Sheet
Balance Sheet - a financial statement that reports assets, liabilities, and owner’s equity on a specific date
Income Statement - a financial statement showing the revenue and expenses for a fiscal period
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17. EXTENDING BALANCE SHEET ACCOUNT BALANCES ON A WORK SHEET
LESSON 6-3
4/17/2017
EXTENDING BALANCE SHEET ACCOUNT BALANCES ON A WORK SHEET
page 162 2 1 3
1. Debit balances without adjustments
2. Debit balances with adjustments
3. Credit balances without adjustments
LESSON 6-3
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18. EXTENDING INCOME STATEMENT ACCOUNT BALANCES ON A WORK SHEET
page 163 1 2 3
1. Sales balance
2. Expense balances without adjustments
3. Expense balances with adjustments
LESSON 6-3

19. Net Income
Net Income – the difference between total revenue and total expenses when total revenue is greater
If Income Statement’s Credits are greater than Debits there is a NET INCOME
LESSON 6-3

20. RECORDING NET INCOME, AND TOTALING AND RULING A WORK SHEET
page 164 4 1 2 3 5 6 7
1. Single rule
2. Totals
4. Extend net income
6. Totals
3. Net income
5. Single rule
7. Double rule
LESSON 6-3

21. Net Loss
Net Loss - the difference between total revenue and total expenses when total expenses are greater
If Income Statement’s Debits are greater than Credits, there is a NET LOSS
LESSON 6-3

22. CALCULATING AND RECORDING A NET LOSS ON A WORK SHEET
page 165 1 2 3 4 5 6 7
1. Single rule
5. Single rule
2. Totals
6. Totals
3. Net loss
7. Double rule
4. Extend net loss
LESSON 6-3

23. TERMS REVIEW balance sheet income statement net income net loss
page 166
balance sheet
income statement
net income
net loss
LESSON 6-3

24. LESSON 6-4 Finding and Correcting Errors on the Work Sheet
4/17/2017
LESSON 6-4
Finding and Correcting Errors on the Work Sheet
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25. CORRECTING AN ERROR IN POSTING TO THE WRONG ACCOUNT
page 168 2
Correct entry 1
Incorrect entry
1. Draw a line through the entire incorrect entry. Recalculate the account balance and correct the work sheet.
2. Record the posting in the correct account. Recalculate the account balance, and correct the work sheet.
LESSON 6-4

26. CORRECTING AN INCORRECT AMOUNT
page 169 2 1 3
1. Draw a line through the incorrect amount.
2. Write the correct amount just above the correction in the same space.
3. Recalculate the account balance, and correct the account balance on the work sheet.
LESSON 6-4

27. CORRECTING AN AMOUNT POSTED TO THE WRONG COLUMN
page 169 2 1 3 5 4 6
4. Draw a line through the incorrect item in the account.
5. Record the posting in the correct amount column.
6. Recalculate the account balance, and correct the work sheet.
LESSON 6-4