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Principles of Accounting I (Ch 4. Completing the Accounting Cycle)CHAPTER 4 COMPLETING THE ACCOUNTING CYCLEWork Sheet as a ToolBenefits of a Work SheetI.Aids the preparation of financial statementsII.Reduces the possibility of errors when working with many accounts and adjustments.III.Links accounts and adjustments to their impacts in financial statements.IV.Assists in planning and organizing an audit of financial statements – as it can be used to reflectany adjustments necessary.V.Helps in preparing interim (monthly and quarterly) financial statement when the journalizing andposting of adjusting entries are postponed until year-end.VI.Shows the effects of proposed or “what-if” transactions.Use of a Work Sheet1Step1. EnterUnadjusted Trial BalanceStep 2. EnterAdjustmentsStep 3. Prepareadjusted Trial BalanceStep 4. Sort Adjusted Trial Balance Amounts toFinancial StatementsStep 5. Total Statement Columns, Compute Income or Loss, and Balance Columns1 Exhibit 4.1 on Page 138Bunker Hill Community CollegePage 1
Principles of Accounting I (Ch 4. Completing the Accounting Cycle)Case)Transactions in Boston Company that occurred during the business cycle are as follows. Journalize eachtransaction.1.Journalizing2/1) The owner (Charles) invested $30,000 cash to establish Boston Company.
3/2) Boston Company paid $2,000 cash for employee salaries.3/2Salaries expense2,000Cash2,0005/20) Boston Company provided its consulting service on account for $10,000.5/20Accounts receivable10,000Consulting revenue10,0007/1) Boston Company paid liability insurance premium or $1,000 for one year.

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Term
Spring
Professor
JenO'Hare

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