Chapter 8
Completing the Accounting Cycle
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Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
This tutorial guides you through creating a worksheet and using it to
record adjusting entries.
For more detailed instructions, refer to Section 8.2 of the Accounting 1
textbook.
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Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
Start with a blank worksheet.
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Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
Record the header in the familiar “who, what, when” format: ?
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Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
List all accounts in order (?), just as you would on a trial balance.
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Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
Enter the ? and ? balances of each ledger account, and ? and ? the
trial balance.
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Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
Some amounts on the trial balance are out of date.
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Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Supplies account has a balance of $1480.90.
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Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Supplies account should have a balance of $526.00, based on
supplies that were used up during the year.
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Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The required adjustment is $?
10 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The amount of supplies used up is an ? (an income statement
account).
11 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The amount of supplies used up is the ? (an income statement
account).
12 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Worksheet must incorporate these differences.
13 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Worksheet must incorporate these differences. This is the first
adjustment, so it is labelled as 1.
14 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
There are other adjustments required before the trial balance is up to
date.
15 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Prepaid Insurance account has a balance of $6564.00.
16 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Prepaid Insurance account should have a balance of $4070.00,
based on insurance that was used up during the year.
17 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The required adjustment is $?
18 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The amount of insurance used up is an ? (an income statement
account).
19 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The amount of insurance used up is the ? (an income statement
account).
20 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Worksheet must incorporate these differences.
21 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Worksheet must incorporate these differences. This is the second
adjustment, so it is labelled as 2.
22 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
Late arriving invoices need to be included.
23 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
Late arriving invoices need to be included. The total of the late
invoices is a credit to ? (new amounts owed).
24 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Worksheet showing adjustments for Late Arriving Invoices.
25 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Worksheet showing adjustments for Late Arriving Invoices.
26 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Worksheet showing adjustments for Late Arriving Invoices.
27 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Worksheet showing adjustments for Late Arriving Invoices.
28 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Worksheet showing adjustments for Late Arriving Invoices.
29 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
Unearned revenue needs to be included.
30 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
Unearned revenue needs to be included. Unearned revenue is a credit
to the Unearned Revenue account.
31 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Worksheet showing adjustments for Unearned Revenue.
32 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
The Worksheet showing adjustments for Unearned Revenue.
33 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
Once all adjustments have been made, ?
34 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
Next, transfer ? column. Be sure to account for any adjustments.
35 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
Transfer all Income ? Be sure to account for any adjustments.
36 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
? the Income Statement and Balance Sheet columns.
37 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
Calculate the Net Income (?). Net Income goes in the outer of the last
four columns.
38 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
Rule and total the last four columns of the Worksheet.
39 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition
Adjusting Entries and the Worksheet
In the case of a Net Loss, the net loss amounts would go in the inner
of the last four columns.
If a company has a net loss, it means expenses are greater than
revenues. The net loss amounts need to go in the inner of the last four
columns, or the Worksheet will not balance.
40 Chapter 8 – Completing the Accounting Cycle | Accounting 1, 7th Edition