1. Unit 9 – The Work Sheet

2. Accounting Cycle to date…

3. The Work Sheet Is a device that organizes the accounting data required for the preparation of financial statements. (large sheet of accounting paper) To help organize work and avoid errors. End of Fiscal period (busy time for accountants) – Prove mathematical accuracy of ledger (trial balance) – Prepare Balance sheet and income statement.

4. The Work Sheet Continued… Few forms – pencil – Not part of permanent accounting records Designed to uncover errors before becoming permanent accounting records Work sheet part of accountants’ “working papers” (not a formal statement)

5. The Work Sheet Continued. Assets Liabilities Owner’s Equity Revenue Expenses SEE FIGURE 5.2 in textbook for details (page 168)

6. Steps in Preparing a Work Sheet 1.Write the Heading - Date line (accounting period) 2.Record the Trial Balance - Debits should equal credits 3.Transfer Balance Sheet items 4.Transfer Income Statement items 5. Complete Income Statement section - See Figure 5.3 (Page 170) - Write difference on the smaller side.

7. Steps in Preparing a Work Sheet 6. Complete the Balance Sheet section - Incorporate Net Income/loss - Net income (add to credit side) OE - Net loss (add to debit side) OE (Example of net loss – Fig 5.4 – page 171) - Debit side should equal credit side. 7. Rule the Work Sheet - Double lines under totals.

9. Using the Work Sheet Prepare the Income Statement – Operating results for a business over a period of time – Revenue info found – Credit column – Expense info found – Debit column Prepare the Balance Sheet – Financial position of a business at a specific date – Net income/loss increases/decreases owner’s equity – ‘Report form’ – is prepared in a vertical format. Examine this form – Figure 5.6 (Page 173)