accounting i chapter 7 – work sheet for a service business
TRANSCRIPT
Accounting IAccounting I
Chapter 7 – Work Sheet for a Service Business
TTERMS REVIEWERMS REVIEWfiscal period
work sheet
trial balance
Lesson 7-1, page 158Lesson 7-1, page 158
TTERMS REVIEWERMS REVIEW
Fiscal PeriodFiscal Period
The length of time for which a business summarizes and reports financial information.
Lesson 7-1, page 156Lesson 7-1, page 156
TTERMS REVIEWERMS REVIEW
Work SheetWork Sheet
A columnar accounting form used to summarize the general ledger information needed to prepare financial statements.
Lesson 7-1, page 156Lesson 7-1, page 156
TTERMS REVIEWERMS REVIEW
Trial BalanceTrial Balance
A proof of the equality of debits and credit is a general ledger.
Lesson 7-1, page 157Lesson 7-1, page 157
PREPARING THE HEADING OF A WORK SHEETPREPARING THE HEADING OF A WORK SHEET
1
3
2
3. Date of Report
1. Name of Company
2. Name of Report
Lesson 7-1, page 156Lesson 7-1, page 156
PREPARING A TRIAL BALANCE ON A WORK SHEETPREPARING A TRIAL BALANCE ON A WORK SHEET
1
3
2
3. Single Rule
1. Account Titles
4. Add Totals
2. Account Balances
4 & 56
5. Write Totals
6. Double Rule
Lesson 7-1, page 157Lesson 7-1, page 157
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TTERMS REVIEWERMS REVIEWadjustments
Lesson 7-2, page 164Lesson 7-2, page 164
TTERMS REVIEWERMS REVIEW
AdjustmentsAdjustments
Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period.
Lesson 7-2, page 160Lesson 7-2, page 160
SUPPLIES ADJUSTMENT ON A WORK SHEETSUPPLIES ADJUSTMENT ON A WORK SHEET
1
2
3. Label the two parts of this adjustment with a small letter a in parentheses, (a).
1. Write the debit amount.
2. Write the credit amount.
3
Lesson 7-2, page 161Lesson 7-2, page 161
PREPAID INSURANCE ADJUSTMENT ON A WORK PREPAID INSURANCE ADJUSTMENT ON A WORK SHEETSHEET
1
2
3. Label the two parts of this adjustment with a small letter b in parentheses, (b).
1. Write the debit amount.
2. Write the credit amount.
3
Lesson 7-2, page 162Lesson 7-2, page 162
PROVING THE ADJUSTMENTS COLUMNS OF A WORK PROVING THE ADJUSTMENTS COLUMNS OF A WORK SHEETSHEET
12
3. Rule double lines.
1. Rule a single line.
2. Add both the Adjustments Debit and Credit columns.
3
Lesson 7-2, page 163Lesson 7-2, page 163
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TTERMS REVIEWERMS REVIEWincome statement
net income
net loss
Lesson 7-3, page 169Lesson 7-3, page 169
TTERMS REVIEWERMS REVIEW
Income StatementIncome Statement
A financial statement showing the revenue and expenses for a fiscal period.
Lesson 7-3, page 166Lesson 7-3, page 166
TTERMS REVIEWERMS REVIEW
Net IncomeNet Income
The difference between total revenue and total expenses when total revenue is greater.
Lesson 7-3, page 167Lesson 7-3, page 167
2. Debit Balances with Adjustments
1. Debit Balances without Adjustments
EXTENDING BALANCE SHEET ACCOUNT BALANCES EXTENDING BALANCE SHEET ACCOUNT BALANCES ON A WORK SHEETON A WORK SHEET
3. Credit Balances without Adjustments
1
2
3
Lesson 7-3, page 165Lesson 7-3, page 165
EXTENDING INCOME STATEMENT ACCOUNT EXTENDING INCOME STATEMENT ACCOUNT BALANCES ON A WORK SHEETBALANCES ON A WORK SHEET
3. Expense Balances with Adjustments
1. Sales Balance
2. Expense Balances without Adjustments
1
3
2
Lesson 7-3, page 166Lesson 7-3, page 166
RECORDING NET INCOME, AND TOTALING AND RECORDING NET INCOME, AND TOTALING AND RULING A WORK SHEETRULING A WORK SHEET
1. Single Rule
3 7
25
6
1
4
7. Double Rule
2. Total
3. Net Income
4. Extend Net Income
5. Single Rule
6. Totals
Lesson 7-3, page 167Lesson 7-3, page 167
CALCULATING AND RECORDING A NET LOSS ON A CALCULATING AND RECORDING A NET LOSS ON A WORK SHEETWORK SHEET
3. Net Loss
1. Single Rule
4. Extend Net Loss
2. Totals
4
3
1
2
Lesson 7-3, page 168Lesson 7-3, page 168
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Page 169Page 169
CHECKING FOR TYPICAL CALCULATION ERRORSCHECKING FOR TYPICAL CALCULATION ERRORS
When two column totals are not in balance, subtract the smaller total from the larger total to find the difference.
Check the difference between the two amounts against the following guides.
1. The difference is 1, such as $.01, $.10, $1.00, or $10.00.
2. The difference can be divided evenly by 2.
3. The difference can be divided evenly by 9.
4. The difference is an omitted amount.Lesson 7-4, page 170Lesson 7-4, page 170
CHECKING FOR ERRORS IN THE WORK SHEETCHECKING FOR ERRORS IN THE WORK SHEET
Check for Errors in the Trial Balance Column–Have all general ledger account balances been copies in the Trial
Balance column correctly?–Have all general ledger account balances been recorded in the
correct Trial Balance column? Check for Errors in the Adjustments Columns
–Do the debits equal the credits for each adjustment?– Is the amount for each adjustment correct?
Check for Errors in Income Statement and Balance Sheet Columns–Has each amount been copied correctly?–Has each amount been extended to the correct column?–Has the net income/loss been calculated correctly?–Has the net income/loss been recorded in the correct column?
Lesson 7-4, page 171Lesson 7-4, page 171
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Page 173Page 173