ACCOUNTING WORKSHEET

ACCOUNTING WORKSHEET:

Accountants use an accounting worksheet to compile, organize, and structure data from the ledger accounts onto one page. In the past, worksheets were constructed on basic ruled paper, but today worksheets are prepared mostly using spreadsheet software.
Worksheets aren't formal documents and are an optional intermediary step for preparing financial statements. Accountants generally prepare worksheets at the end of an accounting period to make sure the books are balanced and to pull together information for the financial statements.

Structure of an Accounting Worksheet

Although the structure of a worksheet can vary, depending on the purpose for which the accountant is preparing the sheet, the traditional accounting worksheet usually has a far left column that contains a list of all the open accounts, plus five pairs of debit and credit columns. One pair at a time would be completed, from left to right.

• The first pair of columns contains the debit or credit balance for the accounts listed in the far left column. This pair of columns is the unadjusted trial balance
• The second pair of columns contains adjusting entries for the accounts
• The third pair of columns is for the adjusted trial balance (Some worksheets skip using these columns)
• The fourth pair of columns is for income statement data (revenue and expense account balances)
• The fifth pair of columns is for balance sheet data (assets, liabilities, owner's capital, and owner's draw)

If the worksheet contains the third, adjusted trial balance column, the accountant can take the numbers from that third column and enter them in the appropriate place in either the fourth or fifth column.

Determining Net Income or Loss

After completing the fourth and fifth columns, the accountant finds the sum totals of the columns. In the income statement columns, if total credits are more than total debits, there’s net income. The accountant then adds the net income number to the debit column for the income statement and to the credit column (representing an increase in owner's equity) for the balance sheet.

If the income statement column shows total debits more than total credits, there’s a net loss. The accountant then adds the net loss number to the income statement’s credit column and to the balance sheet’s debit column.

The worksheet is now complete and can be used to prepare financial statements.