Worksheet end of acct cycle Flashcards
What is step 2 of worksheet preparation?
Step 2: Adjusting Entry Columns
The next two columns contain the “adjustments made” to record the completed portion of business activities that remain underway at the end of the accounting period
What does the 2nd and 3rd columns of a “worksheet” contain?
The first column has the account names, the 2nd is the debit and 3rd is the credit balances of the accounts.
What is step 3 of worksheet preparation?
Step 2: Adjusting Entry Columns
The adjustments entered in columns D and E are added to or subtracted from the unadjusted balances in columns B and C. The two columns are totaled to ensure the equality of debits and credits. The adjusted trial balance is the basis for preparing the financial statements.
Review an example of a worksheet
When doing step 2 of worksheet preparations, you may need to add accounts to the adjusted trial balance list, where should these accounts be listed?
At the end of the current list of accounts in no particular order.
What is step 4 of worksheet preparation?
The income statement balances are transferred to the income statement columns of the worksheet and the columns are totaled.
This entry is made (1) to balance the two income statement columns and (2) to transfer net income to retained earnings.
What is step 6 of worksheet preparation?
The final portion of the worksheet is completed by transferring all the balance sheet account balances from the adjusted trial balance columns (columns F and G) to the balance sheet columns (columns L and M)
What is step 1 of worksheet preparation?
Step 1: The unadjusted trial balance
The worksheet starts with the unadjusted trial balance. The first column contains the listing of accounts used during the period in the same order as the accounts appear in the trial balance—the balance sheet accounts first followed by the income statement accounts
What is step 5 of worksheet preparation?
The amounts for beginning retained earnings and dividends declared are transferred from the adjusted trial balance columns (columns F and G) to the retained earnings statement columns (columns J and K)
The columns are totaled and the difference is the amount of ending retained earnings
This amount is entered in the debit column of the retained earnings statement (to balance the two columns) and transferred to the credit column of the balance sheet
What is a “worksheet”?
an informal schedule that accountants use to assist them in organizing and preparing the information necessary to perform the end-of-period steps in the accounting cycle—namely the preparation of adjusting entries, financial statements, and closing entries
What is the first column of a “worksheet”?
The first column contains the listing of accounts used during the period in the same order as the accounts appear in the trial balance—the balance sheet accounts first followed by the income statement accounts
What is the last thing done at the end of step 2 of creating a worksheet?
Total the columns to verify they match.
