LESSON 6-1 Creating a Worksheet 12/4/2018 LESSON 6-1 Creating a Worksheet

TERMS fiscal period work sheet trial balance page 155 LESSON 6-1 12/4/2018 TERMS page 155 fiscal period work sheet trial balance fiscal period: the length of time for which a business summarizes and reporsts financial information work sheet: a columnar from used to summarize general ledger information needed to prepare financial statements trial balance: proof of the equality to the debits and credits in a general ledger LESSON 6-1

PREPARING THE HEADING OF A WORK SHEET LESSON 6-1 12/4/2018 PREPARING THE HEADING OF A WORK SHEET page 153 Name of Company 1 Name of Report 2 Date of Report 3 LESSON 6-1

PREPARING A TRIAL BALANCE ON A WORK SHEET LESSON 6-1 12/4/2018 PREPARING A TRIAL BALANCE ON A WORK SHEET page 154 2 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

LESSON 6-1 Planning Adjusting Entries on a Work Sheet 12/4/2018 LESSON 6-2 Planning Adjusting Entries on a Work Sheet

TERM adjustments page 161 LESSON 6-1 LESSON 6-1 12/4/2018 Adjustments: changes recorded on a worksheet to update general ledger accounts at the end of the fiscal period LESSON 6-1

SUPPLIES ADJUSTMENT ON A WORK SHEET LESSON 6-1 12/4/2018 SUPPLIES ADJUSTMENT ON A WORK SHEET page 158 2 3 1 1. Write the debit amount. 2. Write the credit amount. 3. Label the two parts of this adjustment. LESSON 6-1

PREPAID INSURANCE ADJUSTMENT ON A WORK SHEET LESSON 6-1 12/4/2018 PREPAID INSURANCE ADJUSTMENT ON A WORK SHEET page 159 2 3 1 1. Write the debit amount. 2. Write the credit amount. 3. Label the two parts of this adjustment. LESSON 6-1

PROVING THE ADJUSTMENTS COLUMNS OF A WORK SHEET LESSON 6-1 12/4/2018 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 6-1

LESSON 6-1 Extending Financial Statement Information on a Work Sheet 12/4/2018 LESSON 6-3 Extending Financial Statement Information on a Work Sheet

TERMS balance sheet income statement net income net loss page 166 LESSON 6-1 12/4/2018 TERMS page 166 balance sheet income statement net income net loss Income Statement: a financial statement showing the revenue and expenses for a fiscal period Balance sheet: a financial statement that reports assets, liabilities, and owner’s equity on a specific date Net loss: the difference between total revenue and total expenses when total revenue is less than total expenses Net Income: the difference between total revenue and total expenses when total revenue is greater LESSON 6-1

EXTENDING BALANCE SHEET ACCOUNT BALANCES ON A WORK SHEET LESSON 6-1 12/4/2018 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 6-1

EXTENDING INCOME STATEMENT ACCOUNT BALANCES ON A WORK SHEET LESSON 6-1 12/4/2018 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 6-1

RECORDING NET INCOME, AND TOTALING AND RULING A WORK SHEET LESSON 6-1 12/4/2018 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 6-1

CALCULATING AND RECORDING A NET LOSS ON A WORK SHEET LESSON 6-1 12/4/2018 CALCULATING AND RECORDING A NET LOSS ON A WORK SHEET page 165 1 2 3 4 1. Single rule 2. Totals 3. Net loss 4. Extend net loss LESSON 6-1

SEQUENCE OF TASKS TO PREPARE A WORK SHEET LESSON 6-1 12/4/2018 SEQUENCE OF TASKS TO PREPARE A WORK SHEET 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 6-1

LESSON 6-1 12/4/2018 LESSON 6-1

LESSON 6-1 12/4/2018 1 LESSON 6-1

LESSON 6-1 12/4/2018 1 2 496400 10000 15000 11000 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 6-1

LESSON 6-1 Finding and Correcting Errors on the Work Sheet 12/4/2018 LESSON 6-4 Finding and Correcting Errors on the Work Sheet

CORRECTING AN ERROR IN POSTING TO THE WRONG ACCOUNT LESSON 6-1 12/4/2018 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 6-1

CORRECTING AN INCORRECT AMOUNT LESSON 6-1 12/4/2018 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 6-1

CORRECTING AN AMOUNT POSTED TO THE WRONG COLUMN LESSON 6-1 12/4/2018 CORRECTING AN AMOUNT POSTED TO THE WRONG COLUMN page 169 1 2 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 6-1