Worksheet for a Merchandising Business

Presented by:Audrey Marshall

For

Accounting Principles

Presented by:Audrey Marshall

For

Accounting Principles

Chapter 15 Chapter 15

Chapter OverviewChapter Overview

Financial Information Using a Worksheet for a Merchandising

Business Recording Payroll Recording Employer Payroll Taxes Reporting Withholding and Payroll

Taxes Paying Withholding and Payroll Taxes

Financial Information Using a Worksheet for a Merchandising

Business Recording Payroll Recording Employer Payroll Taxes Reporting Withholding and Payroll

Taxes Paying Withholding and Payroll Taxes

Merchandising Business Worksheet

Merchandising Business Worksheet

Used by management to make decisions about future business operations

Shows profit or loss Helps determine need for future

changes in business decisions Summarizes information needed to

prepare tax reports

Used by management to make decisions about future business operations

Shows profit or loss Helps determine need for future

changes in business decisions Summarizes information needed to

prepare tax reports

Fiscal PeriodsFiscal Periods

The length of time for which a business summarizes and reports financial information AKA—Accounting Period Begin on any date

Usually Begin 1st Day of Month End on LAST day of the month

IRS must approve

The length of time for which a business summarizes and reports financial information AKA—Accounting Period Begin on any date

Usually Begin 1st Day of Month End on LAST day of the month

IRS must approve

Accounting Concept: Accounting Period Cycle

Work SheetWork Sheet

Columnar accounting form used to summarize the GL information needed to prepare financial statements.

Uses: Summarize GL balances Prove equality of Cr. & Dr. Plan needed changes to update GL balances To calculate Net income/loss

Columnar accounting form used to summarize the GL information needed to prepare financial statements.

Uses: Summarize GL balances Prove equality of Cr. & Dr. Plan needed changes to update GL balances To calculate Net income/loss

Preparing a Work SheetPreparing a Work Sheet

Heading Trial Balance Adjustments

Reflects changes to assets

Income Statement Shows Revenue and Expenses

Balance Sheet Calculate

Heading Trial Balance Adjustments

Reflects changes to assets

Income Statement Shows Revenue and Expenses

Balance Sheet Calculate

Trial BalanceTrial Balance

Proof of the equality of DR & CR Information obtained from GL List ALL accounts

Proof of the equality of DR & CR Information obtained from GL List ALL accounts

AdjustmentsAdjustments

Definition: Changes recorded on a work sheet to update

GL Accounts at the end of the fiscal period.

Supplies & Prepaid Insurance Bring Accounts Up-to-Date Accurate Record Assets

Value of supplies bought Value of remaining insurance policy

Definition: Changes recorded on a work sheet to update

GL Accounts at the end of the fiscal period.

Supplies & Prepaid Insurance Bring Accounts Up-to-Date Accurate Record Assets

Value of supplies bought Value of remaining insurance policy

Adjustments-SuppliesAdjustments-Supplies

Purchase recorded as a DebitSupplies decrease in value daily

Impractical to record decrease dailyAlways given Supplies on Hand

Balance of Supplies 4931.00

Supplies on hand (value of supplies) 2284.00

Supplies Used 2647.00

Adjustments-Prepaid Ins.Adjustments-Prepaid Ins.

Purchase recorded as a Debit Insurance decreases in value daily

Impractical to record decrease daily Always given VALUE of Prepaid

insurance

Purchase recorded as a Debit Insurance decreases in value daily

Impractical to record decrease daily Always given VALUE of Prepaid

insurance

Balance of Prepaid Insurance 1200.00

Value (remaining unused insurance) 1,100.00

Insurance Coverage Used 100.00

Income StatementIncome Statement

Balances of: Revenues Accounts Expense Accounts

Determines: Net Income R>E Net Loss R<E

Balances of: Revenues Accounts Expense Accounts

Determines: Net Income R>E Net Loss R<E

Totals will not equalTotals will not equal

Balance SheetBalance Sheet

Final Step in preparing the WSExtend permanent account balancesAdd net income/lossRe-total

Questions or WYL Quiz?Questions or WYL Quiz?