1. LESSON 6-1 WORK SHEET FOR A SERVICE BUSINESS
4/22/2017
CHAPTER 6
WORK SHEET FOR A SERVICE BUSINESS

2. Fiscal Period: The length of time for which a business
6-1 CREATING A WORK SHEET
Fiscal Period: The length of time for which a business
summarizes and reports financial information.
1 Month, 6 Months, 1 Year
Business can choose length which suit their needs. Period can
be any date, though most businesses begin on the first day
of the month.
Work Sheet: A columnar accounting form used to
summarize the general ledger information needed to
prepare financial statements.

3. PREPARING THE HEADING OF A WORK SHEET
page 153
Name of Company 1
Name of Report 2
Date of Report 3
Trial Balance: A proof of the equality of debits and credits
in the general ledger.
-Account titles listed in the same order as chart of accounts.
-All accounts are listed even if they do not have a balance.

4. 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

5. 6-2 PLANNING ADJUSTING ENTRIES ON A WORK SHEET
LESSON 6-1
4/22/2017
6-2 PLANNING ADJUSTING ENTRIES ON A WORK SHEET
Adjustments: Changes recorded on a work sheet to update
general ledger accounts at the end of a fiscal period.
-Assets like supplies and prepaid insurance are used to earn revenue.
-What we have actually used to earn revenue become expenses.
-We use the work sheet to plan adjustments
4 Questions we ask when analyzing adjustments:
1. What is the balance?
2. What should the balance be?
3. What must be done to correct the account balance?
4. What adjustment is made?
Look at pages

6. 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.

7. 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.

8. 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.

9. 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.

10. 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

11. 6-3 EXTENDING BALANCE SHEET ACCOUNT BALANCES ON A WORK SHEET
LESSON 6-1
4/22/2017
6-3 EXTENDING BALANCE SHEET ACCOUNT BALANCES ON A WORK SHEET
page 162
At the end of each fiscal period, TechKnow prepares two financial statements from
information on the worksheet.
Balance Sheet: Reports assets, liabilities, and owner’s equity on a SPECIFIC Date. 2 1 3
1. Debit balances without adjustments
2. Debit balances with adjustments
3. Credit balances without adjustments

12. EXTENDING INCOME STATEMENT ACCOUNT BALANCES ON A WORK SHEET
page 163
Income Statement: A financial statement showing revenue and expenses for fiscal period called an income statement. 1 2 3
1. Sales balance
2. Expense balances without adjustments
3. Expense balances with adjustments

13. RECORDING NET INCOME, AND TOTALING AND RULING A WORK SHEET
page 164
Revenue > Expenses = Net Income 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

14. CALCULATING AND RECORDING A NET LOSS ON A WORK SHEET
page 165
Expenses > Revenue = Net Loss 1 2 3 4
1. Single rule
2. Totals
3. Net loss
4. Extend net loss