1. Work Sheet for a Service Business
Chapter 6

2. CHAPTER GOALS: Prove debits = credits through Trial Balance
Calculate adjustment for supplies and prepaid insurance
Complete a work sheet
Correct accounting errors
Define and apply accounting terms

3. STANDARDS:
L. Describe and explain the criteria used to determine expenses and journalize the expense transactions.
1.1.11F – Identify, define, and apply key vocabulary
1.1.11D – Identify, describe, and analyze key concepts in chapter.
2.2.11A – Develop and use computation concepts with real numbers.

4. New Vocabulary Adjustments Balance sheet Fiscal period
Income Statement
Net Income
Net Loss
Trial Balance
Work sheet

5. The Work Sheet Purpose: To prove debits = credits
To plan needed changes to ledger accts. to bring balances up to date
To separate acct. balances according to financial statements to be prepared
To calculate the amount of net income or net loss

6. The Work Sheet 5. Acts as a planning tool
6. Used to create consistent reporting – when the same acct. procedures are followed for each acct. period.
7. Summarized by fiscal period
8. Helps to report changes for a fiscal period for financial statements – “Accounting Period Cycle”

7. Creating the Work Sheet
Heading: Who, What, When
Name of Business, Name of Report, Date
Trial Balance – includes ALL accts.; in order of chart of accounts
MUST equal
Adjustments:
represents changes in ledger acct. balances
Income Statement – includes temporary accts.
Balance Sheet – includes permanent accts.

8. PREPARING THE HEADING OF A WORK SHEET
page 153
Name of Company
Name of Report
Date of Report – For fiscal period

9. PREPARING A TRIAL BALANCE ON A WORK SHEET
page 154 2
1. Write the general ledger account titles.
2. Write the general ledger debit & 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. Rule double lines across both Trial Balance columns. 3 5

10. ERRORS IN ACCOUNTING Mathematical – addition/subtraction, etc.
Transposition – switch #’s
$450 - $540
Slide – movement of decimal
$ $1,000.00
Omitted amount
Recorded in incorrect column
Normal balance side