1. Chapter 18 – Worksheets and Classified Financial Statements
Learning Outcome
This chapter shows how to prepare a columnar worksheet and to complete fully classified final reports.
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

2. KEY TERMS Classification Columnar worksheet
Current items in a Balance Sheet
Disclosures
Non-current items in a Balance Sheet
Working capital
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

3. CLASSIFIED BALANCE SHEET
AASB 101
Report showing current assets, non-current assets, current liabilities, non-current liabilities and Equity
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

4. CLASSIFIED INCOME STATEMENT
AASB 101
Report showing details of revenue, expenses, cost of goods sold, gross profit and net profit
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

5. COLUMNAR WORKSHEETS
Columnar worksheets contain balances of general ledger accounts and are used to facilitate preparation of classified accounts.
Balance day adjustments affect either Trading or Profit and loss account and Balance Sheet.
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

6. COLUMNAR WORKSHEETS cont…
Accrued expenses, accrued revenue, prepaid expenses and revenue in advance need to be reversed on first day of next period.
Closing inventory affects both Trading account and Balance Sheet.
Worksheet lists all ledger accounts and makes it easier to calculate gross and net profits.
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

7. CLASSIFICATION OF OPERATING EXPENSES
Selling expenses
Advertising for sales
Sales persons’ salaries
Shop rent
Shop telephone
Freight outwards
Sales commissions paid
Sales vehicles expenses
Depreciation of sales vehicles, shop fittings, etc.
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

8. CLASSIFICATION OF OPERATING EXPENSES cont…
Administrative expenses
Advertising for staff
Administrative staff salaries
Depreciation of assets and motor vehicle
Office expenses
Stationery
Office telephones
Travel expenses
Light and power
Insurance
Rates, rent, taxes
Cleaning
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

9. CLASSIFICATION OF OPERATING EXPENSES cont…
Financial expenses
Discount allowed
Interest on mortgage and loans
Bank charges
Interest on overdraft
Bad debts
Doubtful debts
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

10. CLASSIFICATION OF OPERATING EXPENSES cont…
Miscellaneous revenues
Non-operating revenues
Rental income
Discount revenue
Commission revenue
Interest revenue
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

11. CLASSIFICATION OF OPERATING EXPENSES cont…
Extraordinary items
Rare and unusual items that do not normally occur
Expropriation of assets
Losses from earthquakes or floods or bushfires (not in disaster prone areas)
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

12. CLASSIFICATION OF THE BALANCE SHEET
Current assets
Cash at bank and cash on hand
Inventories
Accounts receivable less provision for doubtful debts
Petty cash advance
Prepaid expenses
Accrued revenue
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

13. CLASSIFICATION OF THE BALANCE SHEET cont…
Current liabilities
Short-term loans
Bank overdraft
Accounts payable
GST liability
Accrued expenses
Revenue in advance
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

14. CLASSIFICATION OF THE BALANCE SHEET cont…
Non-current assets
Plant and machinery
Land and buildings
Motor vehicles
Long-term investments
Patents
Office furniture and fittings
Computers and equipment
Accumulated depreciation deducted from the relevant asset to show amount left to depreciate
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

15. CLASSIFICATION OF THE BALANCE SHEET cont…
Non-current liabilities
Loans secured by mortgage
Long-term loans
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson

16. CLASSIFICATION OF THE BALANCE SHEET cont…
Equity
Capital—amount business owes owner
Drawings— owner’s withdrawals from the business
Net profit or loss—amount transferred from business operations for the year
Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Introductory Accounting 2r, by David Willis
By Kaye Watson