Steps to Creating an Accounting Worksheet

Creating an accounting worksheet is all about putting entries in the right place.

An accounting worksheet is a tool businesses use to evaluate their finances at the end of the year. Accounting worksheets list all the accounts that the business has as well as the cash balance left in those accounts. The balances in the accounts are adjusted for accounts that require it, and any temporary accounts that the business has set up are closed. Accounting worksheets are either prepared manually on ledger paper with 10 numbered columns or electronically using spreadsheet software. The completed worksheet is used to prepare financial statements for the business.

Identifying Trial Balances

Identifying trial balances is done first on the spreadsheet or ledger. The first column (which is not numbered) on the ledger or in the spreadsheet should be filled out with each of the accounts the business has -- typically assets, liabilities, revenue and expenses. The first and second numbered columns are labeled debit and credit. The current balance of each account should be listed under these columns. When the total of debits and credits at the bottom of the sheet are added, they should be equal to one another.

Identifying Adjustments

Adjustments are created in columns three and four. Adjustment entries are made to certain accounts to correct inaccurate account balances. An example would be an "office supplies" account. If your physical balance of supplies is $200, but the account lists a balance of $250, you would make an adjustment entry to match the accurate balance. You'd do this by entering an "office supplies" expense for $50, then adding a credit to the "office supplies" account for the same amount. All adjustments are done the same way, where debits must equal credits.

Adjusted Trial Balances

Once you have done the adjustments to your account balances, you are ready to determine adjusted trial balances. This is done by placing the adjusted account entries in columns five and six. Once again, debits are entered in the column on the left, and credits on the right. For unadjusted accounts, simply transfer the amounts. When you are finished with this step, make sure the debits and credits are equal.

Income Statement

The next two columns are used to calculate the "income statement." This shows all revenues and expenses. All of your company's revenue and expense accounts should be listed in these columns. Total the amounts, which will not be equal. The resulting total, whether positive or negative, shows the company's net income or loss for the year.

Balance Sheet

The last two columns are used to list the balance sheet accounts -- assets, liabilities and equity accounts. Transfer the account balances from the adjusted trial balance columns for these accounts to the last two columns. Add the accounts, whether they be debit or credit amounts. The amounts will not be equal and the difference should match the difference from the income statement columns.

References

• Inc.: Financial Statements
• Principlesofaccounting.com: The Reporting Cycle