1. Adjusting Entries and the Worksheet

2. What is a worksheet? If software is used, the data is almost ready to be presented. If we do not use software, accountants regularly use a worksheet. -It is INFORMAL. It is meant to organize all the information for the finalized financial statements. There are 5 things to know:

3. What is a Worksheet? 1. First 3 columns: Account titles and trial balance amounts. -These have been prepared ahead of time by clerks. 2. Next two columns are for adjustments. -These prepared by a senior accountant. 3. Income statement information in the trial balance columns are copied to the income statement columns. -If an adjustment affects the income statement, a new amount is calculated before it is copied.

4. What is a Worksheet? 4. Balance sheet information in the trial balance columns are copied. -If an adjustment affects this information, it too is calculated before copying. 5. You total the columns. Net income is revealed, the worksheet is balance and RULED to prove the equality. We will be working with Global Logistics.

8. Adjusting for Insurance Used The worksheet shows that the value of 4 insurance policies is $6564. We know though, that the value of insurance has to be updated. What is the value on December 31?

9. Extending the Worksheet We have to move information from the trial balance and adjustments to the Income Statement and Balance Sheet. Step one: Look at each item. Add or subtract depending on the adjustment made (if any). Step two: Move the value from step 1 to one of the last 4 items. -Debits to debits, credits to credits.

10. Let’s Balance the Entire Worksheet 1. Total the last 4 columns. 2. What is the difference between the income statement columns? What is the difference between the balance sheet columns? 3. Totals must be the same. Correct if they are not. 4. Write in Net Income in the Accounts column. -Figure out the totals in the last 4 columns. Single line above, double line below.

11. Preparing the Financial Statements Very easy step. ALL THE INFORMATION YOU NEED IS THERE. Account balance, total revenue, total expenses, and net income(loss). Posting is the final step.