1. The Six-Column Work Sheet6
Prepare a
Work Sheet 6
Prepare a
Work Sheet
The 6th step of the accounting cycle is to prepare a work sheet.
The Work Sheet is a working paper used to collect information from the ledger accounts in one place.
The Work Sheet has 5 sections.
(1) Heading
(2) Account # and Name
(3) Trial Balance Section
(4) Income Statement Section
(5) Balance Sheet Section
Name of Company
Work Sheet
For the Month Ended …….

2. Preparing the Heading Section
The Heading contains three pieces of information. It has the company name, the name of the form, and the period of time that the information in the form covers.

3. The Trial Balance Section
The end-of-period balance from the general ledger for each account is recorded in the Trial Balance Section. All accounts are listed, even if they have a zero balance.

4. Trial Balance Section

5. Trial Balance Section

6. Trial Balance Section

7. Trial Balance Section

12. Totaling the Trial Balance Section
Draw a single line under the last entry and across both amount columns.
Total both amount columns.
If the totals match, draw a double line across both amount columns.

13. Homework
Use the General Ledger Balances from Pages 118 & 119 of Your Workbook to Prepare the Trial Balance Section of the Six-Column Work Sheet for Hot Suds Car Wash.

14. The Income Statement Section
The revenue and expense balances are extended to the Income Statement Section.

15. Totaling the Income Statement Section
Draw a single line under the last entry and across both amount columns.
Total both amount columns.
Those amounts don’t match.

16. Computing a Net Income
When revenues are more than expenses, there is a net income.
Subtract total expenses from total revenues and enter that amount in the debit column.
In the Account Name column, label that amount Net Income.

17. Completing the Income Statement Section With a Net Income
Draw a single line under the net income amount and across both amount columns.
Add the total expense amount and the net income, and bring down the total revenue amount.
The two amounts should match. Draw a double line across both amount columns.

18. Computing a Net Loss
When expenses are more than revenues, there is a net loss.
Subtract total revenues from total expenses and enter that amount in the credit column.
In the Account Name column, label that amount Net Loss.

19. Completing the Income Statement Section With a Net Loss
Draw a single line under the net loss amount and across both amount columns.
Bring down the total expense amount, and add the total revenue amount and the net loss.
The two amounts should match. Draw a double line across both amount columns.

20. Trial Balance & Income Statement Sections Only
Homework
Textbook Page: 199
Workbook Page: 163
Problem 8-4
Trial Balance & Income Statement Sections Only

21. The Balance Sheet Section
The asset, liability and owner’s equity balances are extended to the Balance Sheet Section.

22. Totaling the Balance Sheet Section
Draw a single line across both amount columns that matches with the previous line.
Total both amount columns.
Those amounts don’t match.

23. Completing the Balance Sheet Section With a Net Income
The difference between the two amounts should be the same as the net income.
Record this amount in the credit column.
Total the columns and draw a double line under the final totals.

24. Completing the Balance Sheet Section With a Net Loss
The difference between the two amounts should be the same as the net loss.
Record this amount in the debit column.
Total the columns and draw a double line under the final totals.

25. Complete the Six-Column Work Sheet for Hot Suds Car Wash.
Homework
Complete the Six-Column Work Sheet for Hot Suds Car Wash.

26. Finding Errors Add the debit and credit columns again
Make sure all the General Ledger accounts have been included
Find the difference between the debits and the credits
If the difference is 10, 100, 1,000, and so on, you probably made an addition error
If the difference is evenly divisible by 9, you may have made a transposition error or a slide error
If the difference, when divided by 2, matches one of the account balances, you may have recorded a debit balance as a credit or a credit balance as a debit
If you still have not found the error, recompute the balances in each General Ledger account

27. Transposition Error
A transposition error is when 2 digits within an amount are reversed.
The difference is 90
90 is evenly divisible by 9
Look for a transposition error
2,560 should be 2,650
Correct the amount and now the debits equal the credits.

28. Slide Error A slide error is when a decimal point is moved by mistake.
The difference is 1,800
1,800 is evenly divisible by 9
Look for a slide error
2,000 should be 200
Correct the amount and now the debits equal the credits.

29. Balance Recorded on Wrong side
This occurs when a debit balance is recorded as a credit or a credit balance is recorded as a debit.
When the difference of 1,000 is divided by 2,it is 500.
The balance of the Withdrawal account is 500.
The Withdrawal account should have a Debit Balance.
Correct the amount and now the debits equal the credits.