LESSON 6-1 Creating a Worksheet 1/18/2019 LESSON 7-1 Creating a Worksheet

PREPARING THE HEADING OF A WORK SHEET page 150 Name of Company 1 Name of Report 2 Date of Report 3 Chapter 7

PREPARING A TRIAL BALANCE ON A WORK SHEET page 151 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 Chapter 7

Audit Questions and Terms Fiscal Period length of time for reporting also called Accounting period Worksheet Accounting form that summarizes the general ledger Trial Balance Proof of the debits and credits being equal What is written on the three-line heading on a worksheet Name of Company, Name of Report, Date of Report What general ledger accounts are listed in the Trial Balance columns of a work sheet? All LESSON 6-1

LESSON 6-1 Planning Adjusting Entries on a Work Sheet 1/18/2019 LESSON 7-2 Planning Adjusting Entries on a Work Sheet

SUPPLIES ADJUSTMENT ON A WORK SHEET page 155 2 3 1 1. Write the debit amount. 2. Write the credit amount. 3. Label the two parts of this adjustment. Chapter 7

PREPAID INSURANCE ADJUSTMENT ON A WORK SHEET page 156 2 3 1 1. Write the debit amount. 2. Write the credit amount. 3. Label the two parts of this adjustment. Chapter 7

PROVING THE ADJUSTMENTS COLUMNS OF A WORK SHEET page 157 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. Chapter 7

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. LESSON 6-1

LESSON 6-1

1 LESSON 6-1

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

TERM and AUDIT Adjustments page 158 Adjustments Changes recorded to update general ledger accounts at the end of a fiscal period. Explain the concept of Matching Expenses with Revenues relates to adjustments An expense should be reported in the same fiscal period that is used to produce revenue List the four questions asked in analyzing an adjustment on a worksheet What is the balance of the account? What should the balance be for the account? What must be done to correct the account balance? What adjustment is made? LESSON 6-1

Extending Financial Statement Information on a Work Sheet LESSON 7-3 Extending Financial Statement Information on a Work Sheet

EXTENDING BALANCE SHEET ACCOUNT BALANCES ON A WORK SHEET LESSON 6-1 1/18/2019 EXTENDING BALANCE SHEET ACCOUNT BALANCES ON A WORK SHEET page 159 2 1 3 1. Debit balances without adjustments 2. Debit balances with adjustments 3. Credit balances without adjustments Chapter 7

EXTENDING INCOME STATEMENT ACCOUNT BALANCES ON A WORK SHEET page 160 1 2 3 1. Sales balance 2. Expense balances without adjustments 3. Expense balances with adjustments Chapter 7

RECORDING NET INCOME, AND TOTALING AND RULING A WORK SHEET page 161 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 Chpater 7

CALCULATING AND RECORDING A NET LOSS ON A WORK SHEET page 162 1 2 3 4 1. Single rule 2. Totals 3. Net loss 4. Extend net loss Chapter 7

TERMS REVIEW income statement net income net loss page 166 income statement Shows revenue and expense for a fiscal period net income When the difference between revenue and expense with revenue is higher net loss When the difference between revenue and expense with the expense higher LESSON 6-1

LESSON 6-1

LESSON 6-1

LESSON 6-1 Extending Financial Statement Information on a Work Sheet 1/18/2019 LESSON 6-3 Extending Financial Statement Information on a Work Sheet

EXTENDING BALANCE SHEET ACCOUNT BALANCES ON A WORK SHEET LESSON 6-1 1/18/2019 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 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 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 page 165 1 2 3 4 1. Single rule 2. Totals 3. Net loss 4. Extend net loss LESSON 6-1

TERMS REVIEW balance sheet income statement net income net loss page 166 balance sheet income statement net income net loss LESSON 6-1

Finding and Correcting Errors on the Work Sheet LESSON 6-4 Finding and Correcting Errors on the Work Sheet

CORRECTING AN ERROR IN POSTING TO THE WRONG ACCOUNT LESSON 6-1 1/18/2019 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 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 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

LESSON 6-1 Finding and Correcting Errors on the Work Sheet 1/18/2019 LESSON 6-4 Finding and Correcting Errors on the Work Sheet

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 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 page 169 2 1 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