 Record the end of period General Ledger account balances in the Trial Balance columns of the worksheet. ◦ See General Ledger & Worksheet solutions

 Used to adjust account balances at the end of the fiscal period. ◦ For purposes of the Mini-case this is one month  Brainstorm examples of situations that require accounts to be adjusted through an adjustment entry.  First entered into the Journal. ◦ Identify these by inserting “Adjusting Entries” as a section title before the journalizing the adjusting entries.  After entering the adjusting entries in the Journal, they must be posted to the General Ledger and placed into the “Adjustments” column of the worksheet.

 The sample case has one adjusting entry. ◦ In the Multicolumn Journal write “Adjusting Entries” as a heading in the Item Column. ◦ The rows that follow are used to record any necessary adjusting entries. ◦ An inventory of supplies reveals $150 of supplies used during the month.  Debit Supplies Expense ($150) & credit Supplies ($150)

 Post the two adjusting entries to the General Ledger. ◦ Remember to put the Ledger account numbers in the PR (post reference) column.  After posting - record the adjusting entries in the Adjustment columns of the eight-column worksheet.

 Use the adjusting entry values to update the account balances for each adjusted account.  Place the adjusted account balances, as well as all others, in the Balance Sheet or the Income Statement Columns within the worksheet.

 After the adjusted Trial Balance account totals are extended to the worksheet’s Balance Sheet and Income Statement Columns, it is time to determine whether the business made a profit or suffered a loss during the financial period.  Total the Revenue & Expense worksheet columns.

 Subtract total expenses from total revenue (Revenue minus Expenses = Net Income (profit) or Net Loss. ◦ Enter this value into the worksheet below TOTALS to balance the Income Statement and Balance Sheet Columns. ◦ This entry will be either a debit (Net Income) or credit (Net Loss) in the Income Statement columns; and either a debit (Net Loss) or credit (Net Income) in the Balance Sheet columns.  The amount of the Net Income or Net Loss is important for preparing financial statements and closing entries (see next slide show for more about closing entries).