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Section 2 Extending Amounts Across the Work Sheet

In this chapter, we explore how to extend amounts to the Balance Sheet and Income Statement sections within financial worksheets. You'll learn the importance of the matching principle, which ensures that expenses are matched to the revenues they help generate, and how to accurately calculate and present net income or net loss. Understanding these elements is crucial for grasping the relationships among ledger accounts and their reporting. By the end, you'll appreciate how to effectively complete the work sheet and ensure financial accuracy.

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Section 2 Extending Amounts Across the Work Sheet

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  1. Chapter 8 $ Section 2 Extending Amounts Across the Work Sheet $ • What You’ll Learn • How to extend amounts to the Balance Sheet and Income Statement sections. • The importance of the matching principle. • How to calculate and show the net income or net loss on the work sheet. $ $

  2. Section 2 Extending Amounts Across the Work Sheet (cont'd.) Chapter 8 $ Why It’s Important Preparing the work sheet helps you understand the relationship of all ledger accounts and where they are reported. $ $ • Key Terms • matching principle • net income • net loss $

  3. Section 2 Extending Amounts Across the Work Sheet (cont'd.) Chapter 8 $ The Balance Sheet Section $ $ $

  4. Section 2 Extending Amounts Across the Work Sheet (cont'd.) Chapter 8 $ The Income Statement Section $ $ $

  5. Section 2 Extending Amounts Across the Work Sheet (cont'd.) Chapter 8 $ Totaling the Income Statement and Balance Sheet Sections $ $ $

  6. Section 2 Extending Amounts Across the Work Sheet (cont'd.) Chapter 8 $ Showing Net Income on the Work Sheet $ $ $

  7. Section 2 Extending Amounts Across the Work Sheet (cont'd.) Chapter 8 $ Completing the Work Sheet $ $ $

  8. Section 2 Extending Amounts Across the Work Sheet (cont'd.) Chapter 8 $ Check Your Understanding $ What is the effect of net income on the capital account? $ $

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