5 - Work Sheet & Classified Balance Sheet Flashcards
5.1 - Work Sheet 5.2 - Classified Balance Sheet
When are work sheets created?
Before preparing a trial balance
Work Sheet
a form/device that organizes the accounting data required for the preparation of financial statements
The date in the heading of a work sheet indicates the ____________________________ covered by an accounting period
length of time
General Steps to Create a Work Sheet
- Heading
- Record Trial Balance
- Transfer the Balance Sheet Items
- Transfer the Income Sheet Items
- Complete the Income Statement Section
- Complete the Balance Sheet Section
- Rule the Work Sheet (i.e. double underline)
Alternate Name for Work Sheet
working paper
Purpose of Work Sheets
- reduce error
–> consolidate/place all financial data in one place to make it easier when creating financial statements
Information inside Heading
in general
- who
- what
- when
“For the* (insert period of time) *ended date” — work sheet & income statement
“As at date” — balance sheet
Classified Balance Sheet
a balance sheet which lists items in special categories (eg. current/fixed assets, current/long-term liabilities)
Current Assets
- assets which can be converted into cash, sold, or consumed within one year
What Order are Current Assets Listed in?
Order of Liquidity
Fixed Assets
assets with a long life
What Order are Fixed Assets Listed In?
order of longevity - longest life listed first
Current Liabilities
liabilities which must be paid within one year
Long Term Liability
liabilities which are due in more than a year
Statement of Owner’s Equity
statment which shows the change in value of owner’s equity
demonstrates how much an owner actually owns in the buisness
exactly the same as partial balance sheet
