N O E L A .

B E R G O N I A , C PA , M B A

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ACCOUNTING CYCLE
▪ The accounting cycle refers to a series of sequential steps or procedures
performed to accomplish the accounting process.

Step 1 Step 9
Step 8
Identifying and Preparation of the
Journalize and post
analyzing business post-closing trial
the closing entries
transactions balance

Step 2
Step 7 Step 10
Transactions are
Journalize and post Journalize and post
recorded in the
the adjusting entries the reversing entries
journal

Step 3
Step 6
Journalized entries
Preparation of the
are posted to the
Financial Statements
ledger

Step 5
Step 4
Preparation of the
Preparation of the
Worksheet including
trial balance
the adjusting entries

Noel A. Bergonia, CPA, MBA

WORKSHEET
▪ The worksheet is a columnar sheet of paper used to summarize
information needed to make adjusting and closing entries and to
prepare the financial statements.
▪ A worksheet is only a tool used by accountants and is not part of the
formal accounting records.
▪ A worksheet maybe used each time financial statements are
prepared either monthly, quarterly, or at the end of accounting year.
▪ It is an optional step.

Noel A. Bergonia, CPA, MBA

WORKSHEET
The steps in the preparation of the work sheet are as follows:
▪ Put the header of the worksheet: name of company, “Worksheet” and date.
▪ Enter the titles and balances of ledger accounts in the Trial Balance
columns.
▪ Enter the adjustments in the Adjustments column. Identify each adjustment
with letters.
▪ Enter adjusted account balance in the Adjusted Trial Balance columns.
▪ Extend adjusted balances of revenue and expense accounts from the
Adjusted Trial Balance columns to the Income Statement columns.
▪ Extend adjusted balances of assets, liabilities and owner’s equity accounts
from the Adjusted Trial Balance columns to the Balance sheet columns.
▪ Total the income statement columns and the balance sheet columns. Enter
the net income or net loss as a balancing figure in both pairs of columns
and again compute the column totals.
Noel A. Bergonia, CPA, MBA
 WORKSHEET Worksheet header

Butter Legal Services

Worksheet
For the year ended December 31, 2020
1 2 3 4 5 6 7 8 9 10

ACCOUNT TITLES TRIAL BALANCE ADJUSTMENTS ADJUSTED TRIAL BALANCE INCOME STATEMENT BALANCE SHEET
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
1
2
3
4
5
6
7 It is used to input the It is the original trial Extend the assets,
8
9 copy of the trial balance plus or minus liabilities, and owner's
10
balance. equity accounts from the
11 the adjustments
12 Adjusted Trial Balance
13
14 Used to write the account titles in It is where we temporary Extend all revenue and columns to the Balance
15
16
accordance with chart of accounts. record the adjusting expense account Sheet columns.
17 entries to facilitate the balances from the
18
19 preparation of financial Adjusted Trial Balance
20
21
statements columns to the Income
22 Statement columns.
23
24
25

Noel A. Bergonia, CPA, MBA

 Butter Legal Services
Worksheet
For the year ended December 31, 2020

1 2 3 4 5 6 7 8 9 10

ACCOUNT TITLES TRIAL BALANCE ADJUSTMENTS ADJUSTED TRIAL BALANCE INCOME STATEMENT BALANCE SHEET
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
1 Cash 7 5 0 0 0- 7 5 0 0 0- 7 5 0 0 0-
2 Office Supplies 8 0 0 0- a. 5 5 0 0- 2 5 0 0- 2 5 0 0-
3 Prepaid insurance 1 2 0 0 0- d. 1 0 0 0- 1 1 0 0 0- 1 1 0 0 0-
4 Office Equipment 1 5 0 0 0 0- 1 5 0 0 0 0- 1 5 0 0 0 0-
5 Computer Equipment 6 0 0 0 0- 6 0 0 0 0- 6 0 0 0 0-
6 Accounts payable 5 0 0 0- 5 0 0 0 - 5 0 0 0-
7 Notes payable 5 0 0 0 0- 5 0 0 0 0 - 5 0 0 0 0-
8 Jk, Capital 1 2 4 0 0 0- 1 2 4 0 0 0 - 1 2 4 0 0 0-
9 Jk, Drawing 4 5 0 0 0- 4 5 0 0 0- 4 5 0 0 0-
10 Consulting revenues 3 9 0 0 0 0- 3 9 0 0 0 0 - 3 9 0 0 0 0-
11 Rent Expense 4 5 0 0 0- 4 5 0 0 0- 4 5 0 0 0 -
12 Salaries Expense 1 2 5 0 0 0- e. 4 0 0 0- 1 2 9 0 0 0- 1 2 9 0 0 0 -
13 Telephone Expense 9 0 0 0- 9 0 0 0- 9 0 0 0 -
14 Utilities Expense 4 0 0 0 0- 4 0 0 0 0- 4 0 0 0 0 -
15 Total 5 6 9 0 0 0- 5 6 9 0 0 0-
16 Office supplies expense a. 5 5 0 0- 5 5 0 0- 5 5 0 0-
17 Depreciation expense- OE b. 3 0 0 0 0- 3 0 0 0 0- 3 0 0 0 0-
18 Accumulated depreciation- OE b. 3 0 0 0 0- 3 0 0 0 0- 3 0 0 0 0-
19 Depreciation expense- CE c. 1 0 0 0 0- 1 0 0 0 0- 1 0 0 0 0-
20 Accumulated depreciation- CE c. 1 0 0 0 0- 1 0 0 0 0- 1 0 0 0 0-
21 Insurance expense d. 1 0 0 0- 1 0 0 0- 1 0 0 0-
22 Salaries payable e. 4 0 0 0- 4 0 0 0- 4 0 0 0 -
23 5 0 5 0 0- 5 0 5 0 0- 6 1 3 0 0 0- 6 1 3 0 0 0- 2 6 9 5 0 0- 3 9 0 0 0 0- 3 4 3 5 0 0- 2 2 3 0 0 0 -
24 NET INCOME 1 2 0 5 0 0- 1 2 0 5 0 0 -
25 3 9 0 0 0 0- 3 9 0 0 0 0- 3 4 3 5 0 0- 3 4 3 5 0 0 -
26

Information for the year-end adjustments

a. Office supplies on hand at year-end amounted to P2,500.
b. On Jan. 1, 2020, the company purchased office equipment which cost 150,000 with an expected life of 5 years and no salvage
value.
c. Computer equipment costing P60,000 with an expected life of 3 years have no residual value was purchased on July 1, 2020.
d. A premium of P12,000 for a one-year insurance policy was paid in Dec. 1, 2020.
e. Salaries earned by legal aide, which have not yet been paid, amounted to P4,000.
Noel A. Bergonia, CPA, MBA