Preparing a Worksheet Chapter 6, Section 1

What is accounting? Planning Recording Analyzing Interpreting Which of these have we done so far? CONCEPT: Consistent Reporting Same accounting procedures are followed in the same way in each accounting period

Fiscal Periods Fiscal Period – length of time for which a business summarizes and reports financial information CONCEPT: Accounting Period Cycle Changes in financial information are reported for a specific period of time in the form of financial statements Usually one year Does not always match the calendar year

Work Sheet Planning document Summarizes financial information 4 main reasons to use work sheet Make sure debits equal credits Bring account balances up-to-date Separate accounts according to financial statements Calculate net income/loss

Preparing a Work Sheet Name of Company Name of Report Date of Report Heading Company Name Document Name – Worksheet Date – For (period) ended… Name of Company 1 Name of Report 2 Date of Report 3

Preparing a Trial Balance Purpose: Shows that debits and credits are equal. 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

Assignments Work Together 6-1 (Textbook pg. 155)