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THE WORKSHEET
The accountants often use a worksheet to help transfer data from the
unadjusted trial balance to the financial statements. This multi-
column document provides an efficient way to summarize the data
for financial statement. The accountant generally prepares a
worksheet when it is time to adjust the accounts and prepare
financial statements. Note, however, that it is possible to prepare
financial statements directly from the adjusted trial balance at the
end of the reporting period if the business has relatively few
accounts.
The worksheet simplifies the adjusting and closing process. It can also
reveal errors. The worksheet is not part of the ledger or the journal,
nor is it a financial statement. It is a summary device used by the
accountant for his convenience,
PREPARING THE WORKSHEET
1. Enter the account balances in the unadjusted trial balance columns and total the
amounts.
PREPARING THE WORKSHEET
2. Enter the adjusting entries in the adjustments columns and total the amounts.
 PREPARING THE WORKSHEET
3. Compute each account’s adjusted balance by combing the unadjusted trial balance and the
adjustment figures. Enter the adjusted amounts in the adjusted trial balance columns.
 PREPARING THE WORKSHEET
4. Extend the asset, liability and owner’s equity amounts from the adjusted trial balance columns to
the balance sheet columns. Extend the income and expense amounts to the income statement
columns.
 PREPARING THE WORKSHEET
5. Compute profit or loss as the difference between total revenues and total expenses in
the income statement. Enter the profit or loss as a balancing amount in the income
statement and in the balance sheet, compute the final column totals.

Profit or loss is equal to the difference between the debit and credit columns of the
income statement.

Revenues (Income statement credit column total) P 71,700.00

Expenses (Income statement debit column total) 36,700.00
Profit P 35,000.00
Observe that the capital account amount of P250,000 shown in the worksheet
reflects the beginning rather than the ending balance. Profit must be added
and withdrawals subtracted to arrive at the ending capital balance; this is
done when the statement of changes in equity is prepared.