Chapter 7 & 8 Review

Adjustments

• Adjustment Information:– Supplies on hand $200– Value of Prepaid Insurance $750

• In which column would this information be found on the worksheet? – Trial balance, Adjustments, Income Statement

or Balance Sheet? Debit or Credit?

So how do you calculate the Adjustments for Supplies?

Trial Balance sheet amount – x = Balance Sheet Amount

$895 – x = $200

$895 = x + $200

$695 = x

How do you calculate Net Income or Net Loss??

• Rev – Exp = NI/NL

• Rev > Exp = Net Income

• Exp > Rev = Net Loss

• Where is the total revenue on the work sheet?

• Where is the total expenses on a work sheet?

Rulings

• What does a single line rule indicate?

• Double line?

What about Rulings?

Net Loss

How do you calculate Current Capital (for balance sheet)?

• Capital account balance + Net Income –Drawing

Or

• Capital account balance – Net Loss - Drawing

$3500 - $160 - $400 = $2940

How do you calculate component % on an Income

Statement?• Expenses/Sales

• Net Income (or Loss)/Sales

• Round to the nearest tenth!54.6