Show Menu
Cheatography
  1. Home >
  2. Cheat Sheets >

ACC 271 Exam 2 Review Cheat Sheet (DRAFT) by

ACC 271 Exam 2 Review

This is a draft cheat sheet. It is a work in progress and is not finished yet.

Chapter 4

Work Sheet as a Tool
A.   The work sheet is an internal document that serves as a useful tool for organizing accounting inform­ation. It is not a required report.
B.   Benefits of a Work Sheet: helps in preparing financial statem­ents, reduces risk of errors, links accounts and adjust­ments to financial statem­ents, and shows the effect of proposed or “what if” transa­ctions.
C.   Use of a Work Sheet – constr­ucted at the end of a period before the adjusting process.

Contin­uation

Steps to prepare a work sheet:
  1.   Enter Unadjusted Trial Balance in the first two columns.
  2.   Enter Adjust­ments in the third and fourth columns. Total columns to verify debit adjust­ments equal credit adjust­ments.
  3.   Prepare the Adjusted Trial Balance. This is done by combining the unadjusted trial balance and adjustment columns. Total Adjusted Trial Balance columns to verify debits equal credits.
  4.   Sort Adjusted Trial Balance Amounts to Financial Statem­ents. Expenses and
revenues go to the Income Statement. Withdr­awals and owner’s capital go to the Statement of Owner’s Equity; and assets, liabil­ities and owner’s capital go to the Balance Sheet.
D.   Work Sheet Applic­ations and Analys­is—it does not substitute for financial statem­ents. The financial statement columns yield pro forma financial statements because they show the statements as if the proposed transa­ctions occurred.
  5.   Total Statement Columns, Compute Income or Loss and Balance Columns by
adding net income or loss.