Chapter 7
Preparing A Six-Column Work
Sheet
Learning Objectives
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Explain the purpose of the work sheet.
Describe the parts of a six-column work sheet.
Prepare a six-column work sheet.
Calculate net income and net loss amounts.
Define the accounting terms introduced in this
chapter.
Work Sheet
• A working paper used to collect
information from the ledger
accounts on one sheet of paper.
Ruling
• “Drawing A Line”
• In accounting, a single rule drawn
under a column of amounts means
the entries above the rule are to be
added or subtracted.
Matching Principle
• In accounting, expenses are always
matched against revenue for the same
period.
• See page 139
Net Income
• The amount left after expenses for
the period have been subtracted
from revenue for the period.
Net Loss
• When total expenses are greater
than total revenue.
Summary Of Key Points
• The sixth step of the accounting cycle is preparing a work
sheet.
• A work sheet is prepared to pull together all the information
needed to complete the end of the fiscal period work.
• The trial balance section of the work sheet is completed first.
Until the debits and credits are equal you can not start your
income statement and balance sheet sections.
• Trial balance amounts are extended to the balance sheet
sections and then to the income statement section.
• The work sheet is used to calculate the net income or net loss.