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OBJECTIVES

COMPLETING THE
CHAPTER 4: ACCOUNTING
CYCLE

PREPARE A WORK SHEET PREPARE FINANCIAL

STATEMENTS FROM A WORK
SHEET

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CONTENTS
WORK SHEETS
• Collecting and summarising data (adjusting entries and account
balances)

• Not a formal accounting record

• Prepared by using a spread-sheet program on a computer

Work sheets Steps in completing Financial
a work sheet statements
• Helpful tool in preparing financial statements

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STEPS IN COMPLETING A WORK

WORK SHEETS SHEET
• 6 Columns • Step 1: Enter Trial Balance
• Step 2: Enter Adjustments (Accounts are added –
• 1st : Account title
• 2nd : Trial balance
as needed)
• 3rd : Adjustments • Step 3: Determine Adjusted Trial Balance
• 4th : Adjusted Trial balance
• Step 4: Place adjusted amount to PL or BS
• 5th :Profit and loss Statement
• 6th: Balance sheet • Step 5: Determine profit or loss (The difference
between Dr and Cr of PL)

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FINANCIAL STATEMENTS PROFIT AND LOSS

STATEMENT
• Profit and loss statement • Revenues
• Statement of Owner’s Equity
• Balance Sheet • Expenses

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STATEMENT OF OWNER’S BALANCE SHEET

EQUITY
• Opening Balance of OE • Assets
• Current Assets
• Additional Investment (if any)
• Fixed Assets
• Net profit/(loss)
• Liabilities
• Withdrawals • Current Liabilities
• Closing Balance of OE • Long-term Liabilities

• Owner’s Equity

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CLOSING ENTRIES
• Accounts in PL should have no balances

• Closing these balances by transferring them to Profit and

Loss Summary

• This is called the Closing Process.Transferring entries are

called Closing Entries

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