Chapter 8.1

The Six-Column Work SheetIntroducing the Worksheet

What is it?

-A large sheet of accounting paper used to organize data in the preparation of financial

statements

-Also known as an accountant’s working papers or “rough copy”

Chapter 8.1

The Six-Column Work Sheet

WHY?!?!

Just like how……- Musicians compose a rough draft;-Actors rehearse a big scene;-Directors have a rough story board;-Teachers have a rough lesson plans….

Because practice makes perfect!!!

Chapter 8.1

The Six-Column Work SheetWhy do accountants use the worksheet?

--To discover and eliminate errorsTo discover and eliminate errors

-Just like any other professional, an -Just like any other professional, an accountant prepares rough drafts to accountant prepares rough drafts to

ensure accuracyensure accuracy

-After all -After all Practice makes Perfect!Practice makes Perfect!

Chapter 8.1

The Six-Column Work Sheet

• The six-column work sheet prepares you for the eight-column work sheet in Chapter 9

• Step 1: Write in the heading– Indicate the fiscal period

Chapter 8.1

The Six-Column Work Sheet

• Step 2: Enter, total, and rule the trial balance

Chapter 8.1

The Six-Column Work Sheet

• Step 3: Copy the balance sheet amounts to the balance sheet columns

Chapter 8.1

The Six-Column Work Sheet

• Step 4: Copy the income statement amounts to the income stmt. columns

Chapter 8.1

The Six-Column Work Sheet

• Step 5: Rule and total the last four columns

Total RevenueTotal Revenue

Total ExpensesTotal Expenses

Net IncomeNet Income(the balancing(the balancing figure) figure)

Chapter 8.1

The Six-Column Work Sheet

• Step 6: Record the net income in the outer two of the last four columns

Chapter 8.1

The Six-Column Work Sheet

• Step 7: Total and rule the work sheet

Chapter 8.1

The Six-Column Work Sheet

• Net Loss Situation: Assume Wages and Bank Loan were $40,000 higher

Changes shown Changes shown in red. Total in red. Total Expenses are Expenses are now higher than now higher than Total Revenue.Total Revenue.

Chapter 8.1

The Six-Column Work Sheet

• The amount of the net loss is placed in the inner two of the last four columns

Chapter 8.1

The Six-Column Work Sheet

• Rule and total the work sheet for a loss situation