A company's accounting cycle starts from a business transaction. From there, it goes to the books of prime entry, which constitute its entrance to the accounting systems. Companies then summarize those books and post them to the general ledger. Next, they prepare the trial balance from those ledgers. The trial balance forms a base for the preparation of the financial statements.
The accounting cycle can be a long and tedious process. Accountants are prone to make mistakes during the process. However, they can use some tools to ensure they complete the process accurately. One of these tools includes the accounting worksheet.
What is the Accounting Worksheet?
An accounting worksheet is a tool that records accounting information to help prepare financial statements. It allows accountants to complete the accounting cycle accurately and efficiently. Moreover, it helps them prepare year-end financial reports, including the trial balance and the financial statements. Usually, accountants use a spreadsheet tool to maintain this record.
The accounting worksheet isn't a part of the accounting cycle. However, it can contribute to the process by helping accountants in the preparation process. The accounting worksheet helps analyze and model account balances. Therefore, it is also called the extended trial balance. On top of that, it also helps ensure that accountants derive accounting entries accurately.
What is the Accounting Worksheet format?
The format for the accounting worksheet may differ from one company to another. On top of that, each accountant may prefer to organize this worksheet accordingly. However, there are some common elements to it. Essentially, the accounting worksheet is a spreadsheet that tracks each step in the accounting cycle. Therefore, it includes five sets of columns, the first of which is the unadjusted trial balance.
The accounting worksheet tracks the accounting cycle to the financial statements. This step represents the last column on the worksheet. Essentially, it shows the primary stages in the accounting cycle side by side. Each stage has its debits and credits, with totals calculated at the bottom. In that regard, it resembles a trial balance. However, it contains several columns where these items exist.
The accounting worksheet also includes the underlying company’s name. It will also specify the title of the report, usually termed “Accounting Worksheet”. On top of that, it also contains the period for which it reports information. Primarily, it follows a similar format to the trial balance. Accountants may add or remove information to this format as they please.
How to prepare the Accounting Worksheet?
Preparing the accounting worksheet involves various steps. These steps relate to the accounting cycle that companies follow. In most cases, accountants can prepare the accounting worksheet as follows.
- Identify business transactions and record them as journal entries.
- Post those entries to the general ledger.
- Prepare the unadjusted trial balance from the general ledger.
- Analyze the trial balance and record adjusting entries.
- Post those entries to prepare the adjusted trial balance.
- Prepare the financial statements using the adjusted trial balance.
- Close the temporary accounts using closing entries.
- Prepare the post-closing trial balance for the upcoming accounting period.
- Record reversing entries to cancel temporary adjusting entries, if needed.
Example
Given below is an example of a template for an accounting worksheet.
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Sample Accounting Worksheet[/caption]
Conclusion
An accounting worksheet is a tool that records accounting information. This tool helps facilitate the preparation of financial statements. Although not a part of the accounting cycle, it tracks several stages within the process. The accounting worksheet format is similar to the trial balance. However, it includes various columns for various parts of the accounting cycle.
Post Source Here: Accounting Worksheet: What It Is, How to Do, Example
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