1. LESSON 6-1 Creating a Worksheet
5/2/2019
LESSON 6-1
Creating a Worksheet
GREEN

3. What’s a work sheet?
Businesses prepare a work sheet to summarize (list) revenue and expenses for a fiscal period
A work sheet is a columnar form used to summarize general ledger information used to prepare financial statements
A fiscal period is the length of time which a business summarizes financial information
A fiscal period begins the first day of the month and ends the last day of the month
most businesses use the full length of year as a fiscal period
LESSON 6-1

4. What goes onto a work sheet?
A listing of account titles will come from each ledger
Every account title must be listed even if a balance does not exist on a ledger
Every account title’s balance will be listed in the Trail Balance column. Each account balance comes from the general ledger’s ending balance.
After balances are entered, the total debits and total credits must be equal (proved).
LESSON 6-1

5. PREPARING A TRIAL BALANCE ON A WORK SHEET
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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

6. LESSON 6-2 Planning Adjusting Entries on a Work Sheet
5/2/2019
LESSON 6-2
Planning Adjusting Entries on a Work Sheet
GREEN

7. Planning Adjustments
Sometimes a business will purchase an asset during one fiscal period, but not use it until a later fiscal period.
When a business uses an asset to generate revenue it is considered an expense
This expense should be recorded during the fiscal period that it is used to generate revenue.
LESSON 6-1

8. Planning Adjustments
For example, if a TechKnow bought supplies in November, but did not use the supplies until December, the expense of using the supplies should not be recorded until December.
If we did not record the usage (expense) of an asset, its balance would continue to get larger and larger.
We must adjust each assets’ balance to represent the usage.
LESSON 6-1

9. SUPPLIES ADJUSTMENT ON A WORK SHEET
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If supplies on August 1st has a balance of $1,025 and a balance o n August 31st of $310, what is the amount of supplies used (adjusted) during this fiscal period?
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
If Prepaid Insurance on August 1st has a balance of $1,200 and a balance on August 31st of $1100, what is the amount of insurance used (adjusted) during this fiscal period?
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. LESSON 6-2

13. 1
LESSON 6-2

14. 1 2
496400
10000
15000
11000
20000
5000
500000
62500
356500
21300
2800
30000
102500
120000
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

15. LESSON 6-1