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Chapter 6.1

Chapter 6.1 . Worksheet for a Service Business. WARM UP-Internet Activity-10Points. Go to the homepage for the American Institute of Certified Public Accountants (AICPA) ( www.aicpa.org ) Search the site for information about career resources for students

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Chapter 6.1

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  1. Chapter 6.1 Worksheet for a Service Business

  2. WARM UP-Internet Activity-10Points • Go to the homepage for the American Institute of Certified Public Accountants (AICPA) (www.aicpa.org) • Search the site for information about career resources for students • List two resources provided by the AICPA designed to help students with career choices in the field of accounting • Pick one of these two resources and examine it in more detail. List two interesting pieces of information you learned from this resource.

  3. Objectives for Chapter 6 • Chapter 6 Introduces the 8- Column work sheet. • In order to complete a work sheet, adjustments must be made. • Chapter 6 describes two simple adjustments for a proprietorship-supplies and prepaid insurance.

  4. Objectives for Chapter 6.1 • Define Accounting terms related to a work sheet for a services business organization organized as a proprietorship. • Identify accounting concepts and practices related to a work sheet for a service business organized as a proprietorship. • Prepare a heading and a trial balance on a work sheet

  5. Consistent Reporting • Very Important! • Without consistent reporting, it would be very difficult to compare results from year to year.

  6. Question for YOU! • Can you think of any way to test to see if debit equal credits after all posting is complete? • -If Debits equal Credits for each transaction, total debits should equal total credits. This leads to a listing of each account and its balance-a trial balance.

  7. Terminology • fiscal period-the length of time for which a business summarizes and reports financial information. • work sheet-a columnar accounting form used to summarize the general ledger information needed to prepare financial statements. • trial balance-a proof of the equality of debits and credits in a general ledger.

  8. Explanation • Reporting accounting information for a fiscal period is very important…Why???????? • A fiscal period can begin on any date. However, most businesses begin their fiscal periods on the first day of a month.

  9. LESSON 6-1 Creating a Worksheet

  10. PREPARING THE HEADING OF A WORK SHEET 1 Name of Company 2 Name of Report 3 Date of Report page 153 A WORK SHEET IS A PLANNING DOCUMENT LESSON 6-1

  11. PREPARING THE HEADING OF A WORK SHEET page 153 ALL FINANCIAL STATEMENT HEADINGS ANSWER THE QUESTIONS: WHO? WHAT? AND WHEN? A WORK SHEET IS A PLANNING DOCUMENT LESSON 6-1

  12. PREPARING A TRIAL BALANCE ON A WORK SHEET • ALL ACCOUNTS ARE LISTED IN CHART OF ACCOUNTS ORDER ON A WORK SHEET WHETHER THEY HAVE A BALANCE OR NOT. • ACCOUNT TITLES ARE WRITTEN IN FULL UNLESS THERE IS NOT ENOUGH ROOM. IF THERE IS NOT ENOUGH ROOM, ABBREVIATIONS CAN BE USED • ACCURACY IS IMPORTANT WHEN COPYING ACCOUNT BALANCES TO THE WORK SHEET COLUMNS

  13. PREPARING A TRIAL BALANCE ON A WORK SHEET 2 1 4 3 5 6 page 154 1. Write the general ledger account titles. 2. Write the general ledger debit account balances. Write the general ledger credit account balances. 3. Rule a single line across the two Trial Balance columns. 4. Add both the Trial Balance Debit and Credit columns. 5. Write each column’s total below the single line. 6. Rule double lines across both Trial Balance columns. LESSON 6-1

  14. TERMS REVIEW • fiscal period-the length of time for which a business summarizes and reports financial information. • work sheet-a columnar accounting form used to summarize the general ledger information needed to prepare financial statements. • trial balance-a proof of the equality of debits and credits in a general ledger. page 155 LESSON 6-1

  15. APLIA 6.1 • Work Together and On Your Own • Application Problem • Character Counts Page (Next slide)

  16. Character Counts-10 Points • Access the AICPA’s Code of Professional Conduct at www.aicpa.org. • Citing the exact source for each answer, determine whether a member of the AICPA may: • Accept a gift from a client. (Hint: Search Independent Ethics Rulings) • Charge a client a fee bases on the net income reported on the audited income statement (Hint: Search Contingent Fees) • Advertise professional services in television commercials. (Hint: Search Other Professional Responsibilities and Practices, Advertising Interpretations)

  17. EXIT TICKET • WHAT IS WRITTEN ON THE THREE-LINE HEADING ON A WORK SHEET? • WHAT GENERAL LEDGER ACCOUNTS ARE LISTED IN THE TRIAL BALANCE COLUMNS ON A WORK SHEET?

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