Completing a Balance Sheet and Income Statement Worksheet, Summaries of Business

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THE WORKSHEET

Chapters 8-9, Section 1a

Would you work for a

year (or even a month)

without knowing how

much you would be

making?

https://finance.yahoo.com/quote/AAPL/balance-sheet?p=AAPL https://finance.yahoo.com/quote/JCP/financials?p=JCP https://finance.yahoo.com/quote/TWTR/financials?p=TWTR

ACCOUNTING CONCEPTS

 CONCEPT: Adequate Disclosure  Financial statements contain all information necessary to understand a business’s financial condition.  CONCEPT: Accounting Period Cycle  Financial statements are always prepared at the end of the fiscal period.  CONCEPT: Going Concern  When financial statements are prepared with the expectation that a business will remain in operation indefinitely.

THE WORKSHEET

Single Underline indicates a subtotal. Double Underline indicates the grand total or bottom line.

COMPLETING THE WORKSHEET

THE BALANCE SHEET SECTION

COMPLETING THE WORKSHEET

TOTALING THE COLUMNS

Draw a single line below all columns and total the columns. NOTE: Unlike the trial balance columns, the debit and credit columns will not be equal!

COMPLETING THE WORKSHEET

ENTERING A NET PROFIT

Total expenses (Debit column total) are subtracted from total revenue (Credit column total) to find net income. Net income is entered as a debit at the bottom of the Income Statement section of the work sheet. On the same line, enter the net income amount in the Balance Sheet Credit column.

COMPLETING THE WORKSHEET

ENTERING A NET LOSS

If total expenses (Debit column total) are greater than total revenue (Credit column total) you have a net loss. Net loss is entered as a credit at the bottom of the Income Statement section of the work sheet. On the same line, enter the net loss amount in the Balance Sheet debit column. Complete the worksheet as with a net income: draw a single line across all 4 columns. Calculate and bring down totals. Draw a double rule across all 4 columns.

WORK TOGETHER PROBLEMS

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