WORKSHEET
STEP 1: WRITE THEHEADING
WHO
WHAT
WHEN
ACROSS THE TOP OF THEWORKSHEET
STEP 2: RECORD THE TRIALBALANCE
RECORD THE TITLES ANDBALANCES FROM ALL THE GENERALLEDGER ACCOUNTS ON THE WORKSHEET. ADD THE DEBIT COLUMNBALANCES AND THE CREDITCOLUMN BALANCES. THE DEBIT ANDCREDIT COLUMNS SHOULD SHOWTHE SAME TOTALS.
STEP 3:TRANSFER THEBALANCE SHEET ITEMS
TRANSFER ALL ASSETS, LIABILITIES,AND OWNER’S EQUITY TO THERIGHT COLUMNS. (DEBIT/CREDIT).
STEP 4: TRANSFER THEINCOME STMT ITEMS
TRANSFER ALL REVENUE ANDEXPENSE ITEMS ACCORDING TODEBIT/CREDIT
STEP 5:COMPLETE THEINCOMES STMT SECTION
This section shows the net income or net loss asdetermined by your revenues and expenses.
A single line below your debit and credit columns. Addyou totals to get the amounts.
Determine the difference between the 2 columns
Write the difference between the smaller side .
If revenues exceeds expenses, you have net income. Ifexpenses exceeds revenue you have loss
Net income….represents an increase toowner’s equity
Net loss….represents a decrease toowner’s equity
Classified Balance Sheet
Assets and Liabilities
Assets are divided into two groups:
I. Current
II. Fixed
Liabilities are divided into two groups:
I. Current
II. Long term
Current Assets
Cash and other assets that areconverted into cash, sold, and/orconsumed within one year.
They are listed in the order of liquidity.
ex. 1. Cash
2. Bonds (easily converted)
3. Securities (easily converted)
4. Accounts Receivable (30 days)
5. Pre-Paid Expenses
Prepaid Expenses
Expense payments made in advance
ex. Prepaid insurance
Prepaid rent
Fixed Assets
Assets that are used in the operating ofbusinesses, and have a long life in excess ofone year.
ex. Land, building, equipment, andtrucks,
They could also be listed in the balance sheetas “plant and equipment”, and “capital assets”.
The fixed assets that have the longest life arelisted first. ex Land
Building
Equipment
Delivery trucks
Current Liabilities
Liabilities that have to paid in one year orless
They are listed in order to be paid
ex. Accounts Payable
Taxes Payable
Salaries Payable
Loans Payable
Long Term liabilities
Liabilities that are not due to be paid formore than one year
ex. Bank loan, Mortgage Payable,Car loan
Supporting Statements andSchedules
Statement of Owner’s Equity
provides the owner of a business with data regarding thechange in value of his or her equity from an accountingperiod.
Capital
(+)(-) Income
(-) Drawings
Increase/decrease in capital
==========================
End of the month capital
Supporting Schedule
Schedule of Accounts Receivable
Shows a list of Accounts Receivable and
the amounts that they owe to your
Company
Schedule of Accounts Payable
Shows a list of Accounts Payable and the
amounts that you owe to other companies.