Accounting Worksheet,

Financial Statement
Preparation, and
Statement of
Comprehensive Income

Prepared by:
Rhaelyn Naldoza
Junnadel Lasala
 Accounting Worksheet
- large table of data which may be
prepared by accountants as an optional
intermediate step in an accounting cycle.
- the main purpose is that it reduces the
likelihood of forgetting an adjustment
and it reveals arithmetic errors.
- acts as a tool for an accountant and it is
not usually intended to be used by third
parties. It is an informal document.
 Accounting Worksheet
- consists of a column on the left
showing main account titles and 10
more columns of debits and credits
showing trial balance, adjustments,
adjusted trial balance, incomes
statement and balance sheet.
Preparing a Accounting Worksheet
follow 8 Simple Stepsto verify
accounting information accuracy
before preparation of financial
statements.
Columns of worksheet are drawn
mainly as per necessity. Number of
columns of worksheet depends on
the demand of the particular
organization.
 The following rules are generally
followed in preparing worksheet:
1. Name of business organization and
preparation date
At the beginning of worksheet the name of the
organization for which worksheet is prepared is to
be written in bold form and also the date of
preparation of worksheet is to be mentioned.
2. Drawing column and mentioning the head of
the column
Drawing column titles are to be mentioned
there. For example, serial number in the first
column, title of accounts in the second column and
thereafter pair columns such as Unadjusted Trial
Balance, Adjustment, Adjusted Trial Balance,
3. Unadjusted Trial Balance
After the serial number and accounts title
columns, in unadjusted trial balance, pair
column ledger accounts balances are posted
straight to check the agreement of trial
balance.
This trial balance is called pre-closing trial
balance as it is prepared with the ledger
balances before keeping accounts of
adjustment items. Debit and credit balances
of ledger accounts are written in the debit
and credit columns of the trial balance
respectively.
4. Adjustment column
At the end of accounting period the items or
transactions which have not been accounted for are
written in the debit and credit of adjustment
columns.
At the time of making adjustments if there does not
exist any item in the trial balance for debiting and
crediting, these adjusting items are to be written
below the trial balance under appropriate head(s) in
debit and credit columns of adjustment.
To identify the adjusting items separate code
number for each item be given in debit and credit
columns. Thereafter debit and credit columns of
adjustments are totaled for assuring their
agreement.
5. Adjusted trial balance column
Writing necessary adjustments in the adjustment
column, balance of every account relating to
adjustments is ascertained and thereafter all
ledger account balances including adjusted
ledger balances are recorded in the debit and
credit columns of adjusted trial balance.
That is, unadjusted balances of trial balance are
adjusted as per rules and these are written down
in the column of adjusted trial balance.
Writing all ledger balances adjusted and
unadjusted in adjusted trial balance totals of
debit and credit are ascertained to prove
arithmetical accuracy of the ledger accounts.
6. Income statement column
All periodical expenses and incomes of
adjusted trial balance are written in debit
and credit column of income statement
respectively.
The difference between total income and
total expenses of income statement is called
profit or loss. The profit / loss of income
statement is transferred to balance sheet if
retained earning statement is not prepared.
7. Retained earnings statement
In case of joint stock company, retained
earning column is kept in the worksheet before
balance sheet column.
Here previous years profit / loss if any and
income / loss of income statement of the
worksheet are written in the credit money
column and distribution of items regarding
distribution of profit such as, dividend paid,
proposed dividend, income tax paid, creation of
fund are shown in the debit money column of
retained earnings statement.
The difference between the totals of debit
and credit columns is transferred to balance
sheet column of worksheet.
8. Balance sheet
All assets and liabilities of adjusted trial
balance including balance of income
statement / retained earnings statement
are written in the debit and credit
columns of balance sheet of worksheet
i.e., assets are written in debit money
column and liabilities, owners equity are
written in the credit money column.
 Totals of debit and credit column of
balance sheet are equal. From the
above discussion it is said that the
number of columns of worksheet and
titles of columns depend on nature
and demand of the business concern.
 Preparing the
Financial Statements
 Once the adjusting entries have been
made or entered into a worksheet,
the financial statements can be
prepared using information from the
ledger accounts. Because some of the
financial statements use data from
the other statements, the following is
a logical order for their preparation:
Income Statement
Statement of retained earnings
Balance Sheet
Cash Flow Statement
Income Statement
- reports revenues, expenses, and
the resulting net income.
Statement of Retained Earnings
- shows the retained earnings at the
beginning and end of the accounting
period. It is prepared using the ff. info:
Beginning retained earnings, obtained
from the previous statement of retained
earnings
Net income, obtained from the income
statement
Dividends paid during the accounting
period
Balance Sheet
- reports assets, liabilities, and
shareholder equity of the company.

Cash Flow Statement

- explains the reasons for changes in
the cash balance, showing sources and
uses of cash in the operating, financing,
and investing activities of the firm.
Because it is a cash-basis report, it cannot
be derived directly from the ledger
account balances of an accrual accounting
system. Rather, it is derived by converting
the accrual information to a cash-basis
using one of the ff. two methods:
- Direct method: cash flow information is
derived by directly subtracting cash
disbursements from cash receipts
- Indirect method: cash flow information
is derived by adding or subtracting non-
cash items from income.
Statement of Comprehensive
Income
Comprehensive income is the change
in equity (net assets) of a business
enterprise during a period from
transactions and other events and
circumstances from non-owner
sources. Thestatement of
comprehensive incomeillustrates
the financial performance and results
of operations of a particular company
or entity for a period of time.
So the statement of comprehensive
income aggregates income
statement(profit and loss
statement)andother comprehensive
income which isn't reflected in profits
and losses.
The statement of comprehensive
income is one of the major financial
statements used by accountants and
business owners.