CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 6-3 Extending Financial Statement Information on a Work Sheet

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LFS – Unit 3, Chapter 6Unit Essential Q What must all businesses do at the end of a fiscal period? 2 LESSON 6-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Lesson Essential Question What is the purpose of a worksheet? Acquisition Lesson Questions:  What is a worksheet?  How and when do I prepare a worksheet?  How do you find net income or net loss? 3 LESSON 6-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Notes 6.3 Balance Sheet Column Assets, Liabilities, Owner’s Equity Income Statement Column Revenue and Expenses Follow rules for ledger balances Debit & debit = add Credit & credit = add Debit & credit = subtract, balance is larger side 4 LESSON 6-3

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Notes continued Calculate Net Income or Net Loss Income Statement Columns: Revenue – Expenses If Revenue (cr side) is > Expenses (dr side) = Net Income If Revenue is < Expenses = Net Loss Balance Sheet Column Dr side is > Cr side = Net Income Dr side is < Cr side = Net Loss Net Income or Net Loss must be the same for both columns Steps: 1.Find the difference 2.Add number to the smaller side 3.Total and double rule 5 LESSON 6-3

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 6-3 EXTENDING BALANCE SHEET ACCOUNT BALANCES ON A WORK SHEET page Debit balances without adjustments 2.Debit balances with adjustments 3.Credit balances without adjustments 3 2 1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 6-3 EXTENDING INCOME STATEMENT ACCOUNT BALANCES ON A WORK SHEET page Sales balance 2.Expense balances without adjustments 3.Expense balances with adjustments 1 3 2

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON Single rule 2.Totals 3.Net income RECORDING NET INCOME, AND TOTALING AND RULING A WORK SHEET page Extend net income6.Totals Single rule7.Double rule

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 6-3 CALCULATING AND RECORDING A NET LOSS ON A WORK SHEET page Totals 3.Net loss 4.Extend net loss 1.Single rule

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 LESSON 6-3 TERMS REVIEW balance sheet income statement net income net loss page 166