Worksheets Chapter 7

Fiscal period Length of time for which a business summarizes and reports financial information

Why use a worksheet Summarize general ledger account balances to prove that debits equal credits Plan needed changes to general ledger accounts to bring account balances up to date Separate GL account balances according to finance statement to be prepared Calculate the amount of net income or net loss for a fiscal period

Trial balance Proof of the equality of deits and credits in a general ledger

7-2 Planning Adjustments Adjustments –Changes recorded on a worksheet to update general ledger accounts at the end of a fiscal period Accuracy of planning adjustments are on worksheet, but adjustments MUST be journalized

Supplies Asset balance should reflect supplies on hand Supplies used are debited to Supplies Expense

Prepaid Insurance Insurance expense should be debited for the amount of policy that has been used

7-4 Correcting Errors Most errors are detected in the trial balance Difference is: 1.1 ($.01,.10, 1.00, etc.) – adding error 2.Multiple of 2 – take ½ and look for amount 3.Multiple of 9 – transpose or “slide” 4.Omitted amount

Questions to ask Have