The Six-Column Worksheet Chapter 8

Preparing The Worksheet Work sheet– a working paper used to collect information from the ledger accounts in one place. Will be used later to prepare financial statements Work Sheet Sections Heading Account Name Trial Balance Income Statement Balance Sheet

Preparing the Worksheet Ruling – drawing a line. Trial Balance Section Debits = Credits Identical numbers from ledger and trial balance

Completing the Work Sheet Matching Principle – requires matching expenses from an accounting period with the revenue from the same accounting period Net Income – The amount of revenue that remains after expenses for the period have been subtracted Net Loss – Occurs when expenses > revenue

Completing the Work Sheet Write the heading Account Name Section – Names, Numbers, Balances Trial Balance Section – Prove Debits = Credits Extend the amounts to the appropriate section Income Statement for temporary accounts Balance Sheet for permanent accounts Of course there is an exception - Withdrawals

Completing the Work Sheet Total Income Stmt and Balance Sheet columns Determine Net Income (Loss) Enter amount of net income in appropriate columns Total and Rule