Lesson: 28

Topic: The Six-column Worksheet

Objectives:

By the end of this class, the student should understand the process involved in creating a Six-column Worksheet.

In addition, the student should understand the advantages associated with using the Six-column worksheet to prepare the final Income Statement and related Balance Sheet.

 

J. Smith Consulting Service
Worksheet
For the Month Ended November 30, 2000
	Account Title	Acc. No.	Trial Balance		Income Statement		Balance Sheet
			Debit	Credit	Debit	Credit	Debit	Credit
1	Cash	101	1,600.00						1
2	A/R - Black	105	400.00						2
3	A/R - Seymour	110	1,000.00						3
4	Furniture	115	1,400.00						4
5	Equipment	120	2,800.00						5
6	Building	125	100,000.00						6
7	Bank Loan Payable	201		3,000.00					7
8	A/P - Midland Co.	205		800.00					8
9	A/P - Acme Suppliers	210		500.00					9
10	Mortgage Payable	215		90,000.00					10
11	J. Smith, Capital	301		12,500.00					11
12	J. Smith, Drawings	302	100.00						12
13	Consulting Fees Earned	401		1,800.00					13
14	Hydro Expense	510	200.00						14
15	Rent Expense	515	1,050.00						15
16	Phone Expense	520	50.00						16
17			108,600.00	108,600.00					17
18									18
19									19
20									20
21									21
22									22

Finally, students will examine how we deal with the following situations within the worksheet:

• net income, and
• net loss.

Method of Instruction and Evaluation:

After a Socratic lecture on the above topic, students will complete Exercise 2 (page 261 in the textbook, page #183 in the workbook). Students may also download an electronic 6-Column Worksheet.

Expectations Addressed:

The "Fundamental Accounting Practices" strand of the BAF3M Ministry of Education Curriculum Guidelines outlines all of the following specific expectations. The expectations addressed by this lesson have been highlighted below.

• Introduction to Accounting as a Discipline:
  • explain the purpose of accounting;
  • explain the difference between accounting and bookkeeping;
  • identify the users and uses of accounting;
  • identify the Generally Accepted Accounting Principles (GAAP) and explain their importance.
• Business Structures:
  • describe the characteristics of different forms of business organization, including sole proprietorship, partnership, and corporation;
  • describe the advantages and disadvantages of different forms of business organization, including sole proprietorship, partnership, and corporation;
  • explain the differences among the equity sections of different forms of business organization, including sole proprietorship, partnership, and corporation (e.g., capital account in a sole proprietorship versus common stock in shareholders’ equity in a corporation).
• The Accounting Cycle for a Service Business:
  • assess the effects that transactions have on the accounts and financial statements of a service business;
  • record transactions using the journals and ledgers of a service business;
  • prepare a trial balance and the financial statements for a service business;
  • record adjusting and closing entries for a service business (e.g., prepaid expenses, amortization, accruals);
  • describe the impact of year-end procedures, including adjusting and closing entries, on the financial statements of a service business;
  • apply the Generally Accepted Accounting Principles (GAAP) at each stage of the accounting cycle for a service business.

References:

Text, chapter #8; pages 251 - 259.