Importance of Worksheets in Accounting for Service Businesses
In accounting for service businesses, worksheets play a crucial role in preparing for year-end financial statements. This guide discusses the significance of worksheets, their components, and the steps involved in creating one, using a practical example of Mr. Prosser's Poodles worksheet for the month ending October 31, 20xx.
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Presentation Transcript
CHAPTER 6 WORKSHEET FOR A SERVICE BUSINESS
THE WORKSHEET.. Think of this as a math class. When the teacher hands you an assignment it is called a worksheet, right? Well the thought process is almost the same in accounting.
Mr. Prossers Poodles Worksheet For the month ending October 31, 20xx THE IMPORTANCE OF A WORKSHEET.. Trial Balance Adjustments Income Statement Balance Sheet Account Title Debit Credit Debit Credit Debit Credit Debit Credit A worksheet is simply that it is a document that helps us prepare us for the end of the year. We will do all of the math, bring accounts up to date, and determine net income and loss. First thing we have to do is name the financial document Three things go on every document Name of the business Name of the financial document Time that the document is for ( for month/year ending 20xx)
Mr. Prossers Poodles Worksheet Worksheet For the month ending October 31, 20xx WHY MAKE THE WORKSHEET? Trial Balance Adjustments Income Statement Balance Sheet Account Title Debit 5718 100 150 100 1025 1200 Credit Debit Credit Debit Credit Debit Credit Cash Petty Cash Accts. Rec. Mr. C Accts. Rec. Mr. G Supplies Prepaid Insurance There are 5 components to making the worksheet. Accts. Pay. Mr. E Accts. Pay. Mr. F Mr. P, Capital Mr. P, Drawing Income Summary Sales Advertising Expense Insurance Exp. Supplies Exp Utilities Exp Totals 200 500 5000 1. To make sure the general ledger is in balance 1. We will go back into the general ledger and write down every account we work with and the balance of each of those accounts to make sure we have balance between debits and credits. 625 3565 213 134 9265 9265
Mr. Prossers Poodles Worksheet Worksheet For the month ending October 31, 20xx 5 STEPS TO MAKING A WORKSHEET Account Title Debit Cash Petty Cash Accts. Rec. Mr. C Accts. Rec. Mr. G Supplies Prepaid Insurance Accts. Pay. Mr. E Accts. Pay. Mr. F 500 5000 Trial Balance Adjustments Income Statement Balance Sheet Credit Debit Credit Debit Credit Debit Credit 5718 100 150 100 1025 1200 125 100 900 1100 1. We will go back into the general ledger and write down every account we work with and the balance of each of those accounts to make sure we have balance between debits and credits. . Mr. P, Capital Mr. P, Drawing Income Summary Sales Advertising Expense Insurance Exp. Supplies Exp Utilities Exp Totals 9265 9265 225 200 2. We have to bring all of our accounts up to date. 625 3565 213 100 125 134 225
Mr. Prossers Poodles Worksheet Worksheet For the month ending October 31, 20xx 5 STEPS TO MAKING A WORKSHEET Trial Balance Adjustments Income Statement Balance Sheet Account Title Cash Petty Cash Accts. Rec. Mr. C Accts. Rec. Mr. G Supplies Prepaid Insurance Debit 5718 100 150 100 1025 1200 Credit Debit Credit Debit Credit Debit 5718 100 150 100 Credit 125 100 900 1100 1. We will go back into the general ledger and write down every account we work with and the balance of each of those accounts to make sure we have balance between debits and credits. Accts. Pay. Mr. E Accts. Pay. Mr. F Mr. P, Capital Mr. P, Drawing Income Summary Sales Advertising Expense Insurance Exp. Supplies Exp Utilities Exp Totals 9265 9265 225 200 500 5000 200 500 5000 2. We have to bring all of our accounts up to date. . 3. Move our numbers across the sheet for our financial documents. 625 625 1. INCOME SUMMAY 3565 3565 213 100 125 134 213 100 125 134 225
Mr. Prossers Poodles Worksheet Worksheet For the month ending October 31, 20xx 5 STEPS TO MAKING A WORKSHEET Trial Balance Adjustments Income Statement Balance Sheet Account Title Debit Credit Debit Credit Debit Credit Debit Credit Cash Petty Cash Accts. Rec. Mr. C Accts. Rec. Mr. G Supplies 5718 100 150 100 5718 100 150 100 1025 1200 1. We will go back into the general ledger and write down every account we work with and the balance of each of those accounts to make sure we have balance between debits and credits. Prepaid Insurance Accts. Pay. Mr. E Accts. Pay. Mr. F Mr. P, Capital Mr. P, Drawing Income Summary Sales Advertising Expense Insurance Exp. Supplies Exp Utilities Exp Totals 9265 9265 225 125 100 900 1100 200 500 5000 2. We have to bring all of our accounts up to date. 200 500 3. Move our numbers across the sheet for our financial documents ( this really step three and four). . 5000 625 1. INCOME SUMMARY 625 4. To Determine our Net Income or Net Loss 3565 3565 213 100 125 134 572 2993 213 100 125 134 225 3565 5700 2993 8693 Net Income
