Accounting and Finance Foundations

Unit 7

Accounting and Finance Foundations Unit 7: Financial Statements 551

Financial Statements

Chapter 18

Student Guide

Worksheets

In Unit 6, we discussed computerized accounting systems that allow all transactions to flow through the

accounting cycle electronically. If you want to review these business transactions more closely when using

such a system, you can run a number of different reports. The reports allow you to analyze and research

the business transactions.

It’s important to see how the transactions flow manually in a worksheet (sometimes referred to as working

papers). Some accountants use worksheets to manually compute business transactions to see that they

flow from the trial balance to the balance sheet correctly. Here is an example of a worksheet:

Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit

110 Cash 2,500 2,500 2,500

120 Accounts Receivable 1,200 ( b) 200 1,000 1,000

130 Supplies 500 500 500

150 Office Equipment 1,750 1,750 1,750

160 Office Furniture 1,420 1,420 1,420

165 Accumulated Depreciation ( a) 360 360 360

170 Store Equipment 2,300 2,300 2,300

210 Accounts Payable 5,520 5,520 5,520

310 Owner's Capital 12,150 12,150 12,150

320 Owner's Draw 9,000 9,000 9,000

330 Income Summary 440

410 Revenue, Services 2,500 2,500 2,500

420 Revenue, Other 250 250 250

422 Sales and Returns Allowances ( b) 200 200 200

510 Rent Expense 1,200 1,200 1,200

520 Utilities Expense 550 550 550

530 Depreciation Expense ( a) 360 360 360

20,420 20,420 560 560 20,780 20,780 2,310 2,750 18,470 18,470

Net Income =

Revenues - Expenses =

$2,750

( $2,310)

$440

ABC Company

Work Sheet

For the Month Ending December 31, 20YY

Account Name Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet

The Income Statement Lesson 18.1 (cont’d)