1. Introducing the Worksheet
What is it?
-A large sheet of accounting paper used to organize data in the preparation of financial statements
-Also known as an accountant’s working papers or “rough copy”

2. WHY?!?! Just like how…… - Musicians compose a rough draft; -Actors rehearse a big scene; -Directors have a rough story board; -Teachers have a rough lesson plans…. Because practice makes perfect!!!

3. Why do accountants use the worksheet?
-To discover and eliminate errors -Just like any other professional, an accountant prepares rough drafts to ensure accuracy -After all Practice makes Perfect!

4. Step 1
The six-column work sheet prepares you for the eight-column work sheet in Chapter 9
Step 1: Write in the heading
Indicate the fiscal period

5. Step 2
Step 2: Enter, total, and rule the trial balance

6. Step 3
Step 3: Copy the balance sheet amounts to the balance sheet columns

7. Step 4
Step 4: Copy the income statement amounts to the income stmt. columns

8. Step 5 Step 5: Rule and total the last four columns Total Revenue
Total Expenses
Net Income (the balancing figure)
Step 5: Rule and total the last four columns

9. Step 6
Step 6: Record the net income in the outer two of the last four columns

10. Step 7
Step 7: Total and rule the work sheet

11. Net Loss 1
Changes shown in red. Total Expenses are now higher than Total Revenue.
Net Loss Situation: Assume Wages and Bank Loan were $40,000 higher

12. Net Loss 2
The amount of the net loss is placed in the inner two of the last four columns

13. Net Loss 3
Rule and total the work sheet for a loss situation