Lesson Plan 2.4 – Completing a Worksheet
Course Title – Accounting I
Lesson Purpose - Complete a worksheet for the end of fiscal period.
Behavioral Objectives
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



Analyze adjusting entries.
Extend income statement accounts on a worksheet.
Extend balance sheet accounts on a worksheet.
Calculate net income or net loss.
Prove net income or loss.
Preparation
OLD TEKS Correlations:
2010 TEKS Correlations:
This lesson, as published, correlates
to the following TEKS. Any
changes/alterations to the activities
may result in the elimination of any or
all of the TEKS listed.
120.42.C:
1.a. - describe the purpose of
accounting
1.b. - apply information from source
documents
1.h. - calculate and record end-ofperiod adjustments;
7.a. - follow oral and written
instructions;
7.b. - develop time management
skills by setting priorities for
completing work as scheduled
7.c. - make decisions using
appropriate accounting concepts;
7.g. - demonstrate use of the numeric
keypad by touch
This lesson, as published, correlates
to the following TEKS. Any
changes/alterations to the activities
may result in the elimination of any or
all of the TEKS listed.
130.166.C:
3.i. – journalize and post adjusting
and closing entries
TAKS Correlation:
MATH
Objective 10: The student will demonstrate an understanding of the
mathematical processes and tools used in problem solving.
Materials, Equipment and Resources:

Textbook
Lesson 2-4 – Completing a Worksheet
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1



M & M’s or paperclips
Construction paper
Marker
Teaching Strategies:


Demonstration
Observation
Lesson 2-4 – Completing a Worksheet
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1
Learner Preparation:
Give each student a bag of M & M’s (or about 20 paperclips). Draw two “T”
accounts on the construction paper. Label them Supplies and Supplies Expense.
Have your students put 5 M & M’s on the left side of the Supplies account. Tell
them each M & M represents $100.00 in supplies so they started the fiscal period
with $500.00 balance. Tell them that a few weeks into the fiscal period, the
business spent $200.00 more on supplies. What is the balance now? ($700.00)
A few weeks later, they spent $200 more on supplies. Now what is the balance?
($900.00)
Now it is the end of the fiscal period and the business bought more supplies, but
they used some of those supplies. Subtracting from the supplies account every
time they used a paperclip would require too much time and paperwork; instead
businesses wait until the end of the fiscal period and do an inventory to see how
much is left. The inventory shows $300.00 in supplies left. So remove all the M
& M’s except for 3. Where do those you removed go? They go to the Supplies
Expense account. Expenses are a debit so place them on the debit side. What
is the credit part of that entry?
Lesson Content:
Introduce students to adjusting entries, extending balance sheet and income
statement accounts on the worksheet and figuring net income or net loss.
Assessment:



Observation
Verbal Checking for Understanding
Graded Assignments
Additional Resources:
Textbooks:
Guerrieri, Donald J., Haber, Hoyt, Turner. Glencoe Accounting RealWorld Applications and Connections. Glencoe McGraw-Hill 2000.
ISBN/ISSN 0-02-815004-X.
Ross, Kenton, Gilbertson, Lehman, and Hanson. Century 21 Accounting
Multicolumn Journal Anniversary Edition, 1st Year Course. SouthWestern Educational and Professional Publishing, 2003.
ISBN/ISSN: 0-538-43524-0
Ross, Kenton, Gilbertson, Lehman, and Hanson. Century 21 General
Journal Accounting Anniversary Edition, 7th Edition. SouthWestern Educational and Professional Publishing, 2003.
ISBN/ISSN: 0-538-43529-1.
Websites:
Learning Materials – Accounting. Biz/ed 2009 http://www.bized.co.uk/.
Lesson 2-4 – Completing a Worksheet
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1
Activity 2.4.1 – Preparing Adjusting Entries
Course Title – Accounting I
Lesson Title – Completing a Worksheet
Activity Purpose – Demonstrate ability to adjust supplies and prepaid
insurance for the fiscal period.
OLD TEKS Correlations:
2010 TEKS Correlations:
This lesson, as published, correlates
to the following TEKS. Any
changes/alterations to the activities
may result in the elimination of any or
all of the TEKS listed.
This lesson, as published, correlates
to the following TEKS. Any
changes/alterations to the activities
may result in the elimination of any or
all of the TEKS listed.
120.42.C:
1.b. - Apply basic accounting
130.166.C:
concepts and terminology;
1.h. - calculate and record end-ofperiod adjustments;
7.a. - follow oral and written
instructions;
7.b. - develop time management
skills by setting priorities for
completing work as scheduled
7.c. - make decisions using
appropriate accounting concepts;
7.e. - perform accounting procedures
using manual and automated
methods.
3.i. – journalize and post adjusting
and closing entries
TAKS Correlation:
MATH
Objective 10: The student will demonstrate an understanding of the
mathematical processes and tools used in problem solving.
Materials, Equipment and Resources:




Textbook
Index cards
4 Clear jars
Marbles
Activity 2.4.1 – Preparing Adjusting Entries
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING I
Teaching Strategies:


Demonstration
Observation
Activity 2.4.1 – Preparing Adjusting Entries
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING I
Activity Outline:
Have your students add these terms to their index cards on a ring:
worksheet
Trial
Balance
net income
income
statement
profit
adjustments
net loss
Demonstrate adjusting entries using 4 clear jars. Label them: Supplies
Expense, Insurance Expense, Supplies, and Prepaid Insurance. Have some
marbles available and place them in the Prepaid Insurance jar and the Supplies
jar. Explain as you add the marbles that we have purchased some insurance
that is considered an asset, because we prepaid it. Supplies are also prepaid,
because we haven’t used those yet so they are also an asset.
At the end of the fiscal period though, we do not have as many supplies and
some of the insurance has expired. We need to adjust. In accounting, we are
guided by concepts and we must follow the concept Matching Expenses with
Revenue during the fiscal period. We can not wait until another fiscal period to
show the use of those supplies.
Ask the class, “How can we show that we have fewer supplies?” Take some
marbles out of the supplies jar. We are crediting supplies to take them out, but
what account would be debited? Do a similar demonstration with insurance.
Have your students complete the drill on calculating the adjustments.
Problem 1: Supplies Inventory at the end of the fiscal period, $180.00
Prepaid Insurance valuation at the end of the fiscal period,
$1000.00
1
2
3
4
5
6
Trial Balance
Debit Credit
1400
500
Prepaid Insurance
Supplies
Adjustments
Debit Credit
Insurance Expense
Supplies Expense
Totals
Problem 2: Supplies Inventory at the end of the fiscal period, $700.00
Prepaid Insurance valuation at the end of the fiscal period,
$1000.00
Activity 2.4.1 – Preparing Adjusting Entries
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING I
1
2
3
4
5
6
Trial Balance
Debit Credit
1500
1200
Prepaid Insurance
Supplies
Adjustments
Debit Credit
Insurance Expense
Supplies Expense
Totals
Problem 3: Supplies Inventory at the end of the fiscal period, $125.00
Prepaid Insurance valuation at the end of the fiscal period,
$600.00
1
2
3
4
5
6
Trial Balance
Debit Credit
900
435
Prepaid Insurance
Supplies
Adjustments
Debit Credit
Insurance Expense
Supplies Expense
Totals
Assessment:


Observation
Adjusting Entries Quiz
Activity 2.4.1 – Preparing Adjusting Entries
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING I
ADJUSTING ENTRIES QUIZ
1. What is the concept that requires showing expenses during the same
fiscal period as the one in which the revenue is earned?
a. Going Concern
b. Business Entity
c. Matching Expenses with Revenue
d. Historical Cost
2. To adjust supplies, what account is debited?
a. Supplies
b. Supplies Expense
c. Prepaid Insurance
d. Insurance Expense
3. To adjust supplies, what account is credited?
a. Supplies
b. Supplies Expense
c. Prepaid Insurance
d. Insurance Expense
4. To adjust Prepaid Insurance, what account is debited?
a. Supplies
b. Supplies Expense
c. Prepaid Insurance
d. Insurance Expense
5. To adjust Prepaid Insurance, what account is credited?
a. Supplies
b. Supplies Expense
c. Prepaid Insurance
d. Insurance Expense
6. The Trial Balance shows $520 in supplies, but the ending inventory
shows $500. What is the amount of the adjustment?
a. 500
b. 520
c. 20
d. None of the above
7. The Trial Balance shows $1200 in Prepaid Insurance, but the
insurance report valuation shows its value at $980.00. What is the
amount of the adjustment?
a. $1200
b. $980
c. 320
d. 230
8. If there were no adjusting entries made, what impact would that have
on net income?
a. more
b. less
2.4.1 – Quiz on Adjusting Entries
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING I
ADJUSTING ENTRIES QUIZ - KEY
1. What is the concept that requires showing expenses during the same
fiscal period as the one in which the revenue is earned?
b. Going Concern
c. Business Entity
c. Matching Expenses with Revenue
d. Historical Cost
2. To adjust supplies, what account is debited?
d. Supplies
b. Supplies Expense
c. Prepaid Insurance
d. Insurance Expense
3. To adjust supplies, what account is credited?
a. Supplies
b. Supplies Expense
c. Prepaid Insurance
d. Insurance Expense
4. To adjust Prepaid Insurance, what account is debited?
a. Supplies
b. Supplies Expense
c. Prepaid Insurance
d. Insurance Expense
5. To adjust Prepaid Insurance, what account is credited?
a. Supplies
b. Supplies Expense
c. Prepaid Insurance
d. Insurance Expense
6. The Trial Balance shows $520 in supplies, but the ending inventory
shows $500. What is the amount of the adjustment?
a. $500
b. $520
c. $20
d. None of the above
7. The Trial Balance shows $1200 in Prepaid Insurance, but the
insurance report valuation shows its value at $980.00. What is the
amount of the adjustment?
a. $1200
b. $980
c. $320
d. $230
8. If there were no adjusting entries made, what impact would that have
on net income?
a. more
b. less
2.4.1 – Quiz on Adjusting Entries
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING I
Activity 2.4.2 – Income Statement and Balance Sheet
Accounts
Course Title – Accounting I
Lesson Title – Completing a Worksheet
Activity Purpose – Classify income statement and balance sheet accounts
and sort them correctly.
OLD TEKS Correlations:
2010 TEKS Correlations:
This lesson, as published, correlates
to the following TEKS. Any
changes/alterations to the activities
may result in the elimination of any or
all of the TEKS listed.
120.42.C:
1.b. - Apply basic accounting
concepts and terminology;
1.i. – update accounts through
adjusting and closing entries
7.a. - follow oral and written
instructions;
7.b. - develop time management
skills by setting priorities for
completing work as scheduled
7.c. - make decisions using
appropriate accounting concepts;
7.e. - perform accounting procedures
using manual and automated
methods.
This lesson, as published, correlates
to the following TEKS. Any
changes/alterations to the activities
may result in the elimination of any or
all of the TEKS listed.
130.166.C:
3.a. – classify, record, and summarize
financial data;
3.i. - journalize and post adjusting
and closing entries
TAKS Correlation:
WRITING
Objective 6: The student will demonstrate the ability to revise and proofread to
improve the clarity and effectiveness of a piece of writing.
MATH
Objective 10: The student will demonstrate an understanding of the
mathematical processes and tools used in problem solving.
Activity 2.4.2 – Income Statement and Balance
Sheet Accounts
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING I
Materials, Equipment and Resources:

Textbook
Teaching Strategies:


Demonstration
Observation
Activity 2.4.2 – Income Statement and Balance
Sheet Accounts
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING I
Activity Outline:
Sort accounts by whether they are found on the balance sheet or income
statement. Remind students that they prepared a balance sheet before. See if
they can tell you what classification of accounts are on the balance sheet. What
type of accounts are these? Are they permanent or temporary?
What two things affect net income or loss? These are the accounts extended to
the income statement section of the worksheet.
Demonstrate moving the balances over to the balance sheet. Emphasize
recalculating the supplies and insurance balance. Have your students check the
number of accounts to be sure they did not leave any out and recheck to make
sure they have not made common errors like slides, transpositions or putting the
amount on the wrong side. Checking now might prevent them from losing a lot of
time later.
Demonstrate moving the balances for revenue and expenses over to the income
statement section of the worksheet. Again, emphasize checking for errors
carefully.
Have your students check their knowledge by completing this exercise. Ask
them to place an “X” in all columns in which the account would appear.
Account Name
Trial
Balance
dr
cr
Adjustments
dr
cr
Income
Statement
dr
cr
Balance
Sheet
dr
cr
1 Insurance
Expense
2 Cash
3 Sylvia Morales,
Capital
4 Fees Earned
5 Supplies
6 Prepaid
Insurance
7 Advertising
Expense
8 Miscellaneous
Expense
9 Sylvia Morales,
Drawing
10 Bank of Liberty
Activity 2.4.2 – Income Statement and Balance
Sheet Accounts
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING I
Assessment:


Observation
Graded Assignment
Number Grade
Correct
22
100%
21
95%
20
91%
19
86%
18
82%
17
77%
16
73%
15
68%
14
64%
13
59%
12
55%
11
50%
Activity 2.4.2 – Income Statement and Balance
Sheet Accounts
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING I
Activity 2.4.3 – Calculating Net Income or Loss
Course Title – Accounting I
Lesson Title – Completing a Worksheet
Activity Purpose - Demonstrate skill in calculating net income or loss.
OLD TEKS Correlations:
2010 TEKS Correlations:
This lesson, as published, correlates
to the following TEKS. Any
changes/alterations to the activities
may result in the elimination of any or
all of the TEKS listed.
120.42.C:
1.b. - Apply basic accounting
concepts and terminology;
7.a. - follow oral and written
instructions;
7.b. - develop time management
skills by setting priorities for
completing work as scheduled
7.c. - make decisions using
appropriate accounting concepts;
7.e. - perform accounting procedures
using manual and automated
methods.
This lesson, as published, correlates
to the following TEKS. Any
changes/alterations to the activities
may result in the elimination of any or
all of the TEKS listed.
130.166.C:
3.k. - prepare work sheets
3.o. – calculate business profitability;
3.p. – prepare income statements
TAKS Correlation:
MATH
Objective 10: The student will demonstrate an understanding of the
mathematical processes and tools used in problem solving.
Materials, Equipment and Resources:

Textbook
Teaching Strategies:


Demonstration
Observation
Activity 2.4.3 – Calculating Net Income and Net Loss
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1
Activity Outline:
1. Have students define net income and net loss.
2. Demonstrate calculating the net income and net loss with an Income or
Loss presentation.
3. Have students take this quiz:
Problem 1:
Income Statement
Balance Sheet
DR
CR
DR
CR
2100.00
3085.00
1500.00
515.00
Problem 2:
Income Statement
DR
CR
Balance Sheet
DR
CR
1400.00
1435.00
2135.00
700.00
Problem 3:
Income Statement
DR
CR
Balance Sheet
DR
CR
410.00
1320.00
1025.00
705.00
Assessment:


Observation
Graded Assignment
Activity 2.4.3 – Calculating Net Income and Net Loss
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING 1