Preparation of Adjusting Entries

using the Worksheet

This step is simply about plotting the items in
the unadjusted trial balance on the worksheet.
In a manual accounting system, a worksheet
is a large columnar sheet of paper specifically
designed to conveniently arrange all the
accounting information required at the end of a
period.
The worksheet is used to check whether ledger
accounts are balanced and adjusted. The
satisfactory completion of a worksheet provides
assurance that all the details of the end-of-
period accounting procedures were properly
brought together.

The worksheet serves as the source in the

preparation of financial statements and other
closing and adjusting entries.
 PURPOSES OF THE WORKSHEET

1. ASSIST for easier preparation of financial

statements.
2. Quickly arrive at adjusted balances of accounts.
3. Show FINANCIAL POSITION & RESULTS
from OPERATIONS.
4. REDUCES Risk of OMITTING accounting data.
5. DETAILED & ACCURATE work.
 PARTS OF THE WORKSHEET
A. Header – written at the center of the
worksheet.
B. Body – contains columns where all AMOUNTS
are places.
Col. 1-2 Unadjusted Trial Balance
Col. 3-4 Adjustments
Col. 5-6 Adjusted Trial Balance
Col. 7-8 Income Statement
Col. 9-10 Balance Sheet
 STEPS IN PREPARING A 10-COL. WORKSHEET
1. Write the header
2. Write the body
TRIAL BALANCE (Unadjusted) –copy the account titles and
their corresponding amounts under the
Trial Balance(Unadjusted)
 ADJUSTMENTS – prepare the needed adjustments identified.
- enter the adjusting entries identified in the
adjustments columns. If account is not on the
list of accounts, add such account below the
“TOTAL” in the description column.
 ADJUSTED TRIAL BALANCE
a. compare the Unadjusted trial balance columns from the
Adjustments columns.
b. Extract the adjusted balances of accounts that were
adjusted following this rule:
ADD: Debit entry and the Debit Adjustments
Credit entry and the Credit Adjustments
SUBTRACT: Debit entry and the Credit Adjustments
Credit entry and the Debit Adjustments

DOUBLE RULE the debit and credit columns of the Adjusted

Trial Balance for a new TOTAL.
After all the adjusting entries are made, the
adjusted trial balance can now be prepared.

This is done by updating the balances of the

items from the unadjusted trial balance,
and if applicable, add items that came only
after the preparation of the adjusting
entries.
 THE ADJUSTED TRIAL BALANCE IS
SIMPLY THE UNADJUSTED TRIAL
BALANCE PLUS THE EFFECTS OF THE
ADJUSTING ENTRIES.