Work Sheet

17 views2 pages
Published on 27 Oct 2010
School
UTSC
Department
Financial Accounting
Course
MGAB01H3
Professor
Work Sheet
¾ A work sheet is a multiple-column form that may be used in the adjustment process
and in preparing financial statements.
¾ As its name suggests, the work sheet is a working tool for the accountant. A work
sheet is not a permanent accounting record; it is neither a journal nor a part of the
general ledger.
¾ Financial statements, for example, can be easily prepared from the work sheet,
reducing errors.
Closing the Books
¾ At the end of the accounting period, temporary accounts are closed and made ready
for the next accounting period.
¾ Temporary accounts relate to a single accounting period. They include all income
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¾ In contrast, permanent accounts consist of all balance sheet accounts, including the
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Preparing Closing Entries
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¾ Temporary account balances are transferred to the equity account of the RZQHU¶V
capital.
¾ Closing entries formally record in the ledger the transfer of net income (or net loss)
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¾ Closing entries produce a zero balance in each temporary account. These accounts are
then ready to accumulate data in the next accounting period separately from the data
of earlier periods.
Posting Closing Entries
¾ Closing entries, ensuring temporary accounts ending with a zero balance, are posted
to the general ledger.
Preparing a Post-Closing Trial Balance
¾ After closing entries have been journalized and posted, a post-closing trial balance is
prepared.
¾ The purpose of this trial balance is to prove the equality of the permanent account
balances that are carried forward into the next accounting period.
¾ Only permanent (balance sheet) accounts should be on the post-closing trial balance.
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Document Summary

A work sheet is a multiple-column form that may be used in the adjustment process and in preparing financial statements. As its name suggests, the work sheet is a working tool for the accountant. A work sheet is not a permanent accounting record; it is neither a journal nor a part of the general ledger. Financial statements, for example, can be easily prepared from the work sheet, reducing errors. At the end of the accounting period, temporary accounts are closed and made ready for the next accounting period. Temporary accounts relate to a single accounting period. In contrast, permanent accounts consist of all balance sheet accounts, including the. Temporary account balances are transferred to the equity account of the 43078 capital. Closing entries formally record in the ledger the transfer of net income (or net loss) Closing entries produce a zero balance in each temporary account.