1. Work Sheet for a Service Business
Chapter 6
Work Sheet for a Service Business

2. 6.1 Creating a worksheet
Fiscal/accounting period – the length of time for which a business summarizes and reports financial information
Work sheet – a columnar accounting form used to summarize the general ledger information needed to prepare financial statements
Trial balance – a proof of the equality of debits and credits in a general ledger

3. LESSON 6-2

4. Accounting Concept:
Consistent Reporting – accounting concept when the same accounting procedures are followed in the same way in each accounting period
Accounting Period Cycle – accounting concept when changes in financial information are reported for a specific period of time

5. PREPARING THE HEADING OF A WORK SHEET
page 153
Name of Company 1
Name of Report 2
Date of Report 3
LESSON 6-1

6. PREPARING A TRIAL BALANCE ON A WORK SHEET
page 154 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
LESSON 6-1

7. 6.2 Adjusting entries on a work sheet
Adjustments – changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period
The portions of assets consumed in order to earn revenue become expenses of the business

8. Accounting Concept:
Matching Expenses with Revenue – accounting concept when revenue from business activities and expenses associated with earning that revenue are recorded in the same accounting period

9. SUPPLIES ADJUSTMENT ON A WORK SHEET
page 158 2 3 1
1. Write the debit amount.
2. Write the credit amount.
3. Label the two parts of this adjustment.
LESSON 6-2

10. PREPAID INSURANCE ADJUSTMENT ON A WORK SHEET
page 159 2 3 1
1. Write the debit amount.
2. Write the credit amount.
3. Label the two parts of this adjustment.
LESSON 6-2

11. PROVING THE ADJUSTMENTS COLUMNS OF A WORK SHEET
page 160 1 2 3
1. Rule a single line.
2. Add both the Adjustments Debit and Credit columns. Write each column’s total.
3. Rule double lines.
LESSON 6-2

12. 1 2
496400
10000
15000
11000
102500
120000
20000
5000
500000
62500
356500
21300
2800
30000
(a) 71500 3
(b) 10000 4 5
881500
881500
81500
81500
LESSON 6-2

13. 6.3 Financial statement information on a Work Sheet
Balance Sheet – a financial statement that reports assets, liabilities, and owner’s equity on a specific date
Income Statement – a financial statement showing the revenue and expenses for a fiscal period
Net income – when total revenue is greater than total expenses
Net loss – when total expenses is greater than total revenue

14. Chart of accounts

15. EXTENDING BALANCE SHEET ACCOUNT BALANCES ON A WORK SHEET
LESSON 6-3
2/16/2019
EXTENDING BALANCE SHEET ACCOUNT BALANCES ON A WORK SHEET
page 162 2 1 3
1. Debit balances without adjustments
2. Debit balances with adjustments
3. Credit balances without adjustments
LESSON 6-3

16. EXTENDING INCOME STATEMENT ACCOUNT BALANCES ON A WORK SHEET
page 163 1 2 3
1. Sales balance
2. Expense balances without adjustments
3. Expense balances with adjustments
LESSON 6-3

17. RECORDING NET INCOME, TOTALING AND RULING A WORK SHEET
page 164 4 1 2 3 5 6 7
1. Single rule
2. Totals
4. Extend net income
6. Totals
3. Net income
5. Single rule
7. Double rule
LESSON 6-3

18. CALCULATING AND RECORDING A NET LOSS ON A WORK SHEET
page 165 1 2 3 4
1. Single rule
2. Totals
3. Net loss
4. Extend net loss
LESSON 6-3

19. 1 2
496400
10000
15000
11000
102500
120000
20000
5000
500000
62500
356500
21300
2800
30000
496400
10000
15000
31000
110000
20000
5000
500000
62500 6
(a) 71500 3
(b) 10000 4
11000
21300
2800
30000
356500
10000
71500 7 5
881500
881500
81500
81500
146600
356500
734900
525000
Net Income 8
209900
209900 9
356500
356500
734900
734900
LESSON 6-2

20. 4.4 Finding and Correcting Errors on the Work Sheet
Calculation Errors:
The difference is 1 ($.01, $.10, $1.00, $10)
Most likely addition
The difference can be divided evenly by 2
Look for half the difference see if it was placed in the wrong column (ex: $48 difference look for a $24 amount in the incorrect column)
The difference can be divided evenly by 9
Look for transposed numbers (ex: $45 written as $54) or look for a slide (ex: $12 written as $120)
The difference is an omitted amount
Look for the exact amount on the worksheet (ex: $253 as miscellaneous expense)

21. Finding and Correcting Errors on the Work Sheet
Work Sheet – complete in pencil and simply erase
Ledger…

22. CORRECTING AN ERROR IN POSTING TO THE WRONG ACCOUNT
LESSON 6-4
2/16/2019
CORRECTING AN ERROR IN POSTING TO THE WRONG ACCOUNT
page 168 2
Correct entry 1
Incorrect entry
1. Draw a line through the entire incorrect entry. Recalculate the account balance and correct the work sheet.
2. Record the posting in the correct account. Recalculate the account balance, and correct the work sheet.
LESSON 6-4

23. CORRECTING AN INCORRECT AMOUNT
page 169 2 1 3
1. Draw a line through the incorrect amount.
2. Write the correct amount just above the correction in the same space.
3. Recalculate the account balance, and correct the account balance on the work sheet.
LESSON 6-4

24. CORRECTING AN AMOUNT POSTED TO THE WRONG COLUMN
page 169 1 2 3 5 4 6
4. Draw a line through the incorrect item in the account.
5. Record the posting in the correct amount column.
6. Recalculate the account balance, and correct the work sheet.
LESSON 6-4