The Six Column Work Sheet Chapter 8 The Six Column Work Sheet

Learning Objectives Explain the purpose of the work sheet Describe the parts of a six-column work sheet Prepare a six column work sheet Calculate net loss and net income Define the accounting terms introduced in this chapter.

Section 8-1 What you will learn? Why it is important? The purpose of the worksheet The kinds of information contained in the heading. How to prepare a trial balance on a work sheet. How to rule a section of the work sheet Why it is important? The worksheet is a tool the accountant uses to collect all the information needed for the end-of-period activities.

Preparing the Worksheet

The 6th Step: The Work Sheet Working paper used to collect information from the ledger accounts in one place. Tool the accountant uses to prepare financial statements May be prepared in pencil

The work sheet The heading: Who, What, When (always centered) The account name section The trial balance section The income statement section The balance sheet section

The Account Name and Trial Balance Sections List all accounts with account numbers in the order it is in the general ledger with the balances

Ruling and Totaling

Thinking Critically 1. What is the purpose of the work sheet? What is the purpose of ruling in accounting?

Chap 8: Section 2 What you will learn? Why it’s important? How to extend amounts to the Balance Sheet and Income Statement sections The importance of the matching principle. How to calculate and show the net income or net loss on the work sheet. Why it’s important? Preparing the work sheet helps you understand the relationship of all ledger accounts and where they are reported.

The Balance Sheet Section Contains the “balance sheet” accounts—assets, liabilities and owner’s equity accounts After the trial balance section is completed: extend, or transfer, the appropriate amounts to the Balance sheet section Extend debit amounts to debit column Extend credit amounts to credit columns

The Balance Sheet Section

The Income Statement Section Contains the revenue and expense accounts Revenue balances extended to credit side Expense balances extended to debit side

Income Statement Section