Project 1: Training Room Summary

1. Project 1

1.10. Training Room Summary

Project 1: The Worksheet

Scrabble pieces spelling Profit down and Loss across.

Training Room Summary

You have now extended the trial balance totals to the balance sheet and the income summary sections of the worksheet.

Remember that the trial balance totals are extended to either the balance sheet columns or the income statement columns, but never both.

Do you remember what accounts are extended into which column?

Check your answer.

Assets, liabilities, and owner’s equity, including drawing, are extended to the balance sheet columns. Revenue and expenses are extended to the income statement columns.

Also, recall that the total debits do not equal the total credits in the income statement columns or the balance sheet columns at this point. Debits will equal credits when the worksheet is completed in the next training room.

Extending the worksheet is the groundwork necessary to determine whether a company made a profit or a loss and the rough work that will be used to complete formal financial statements.

Continue on to Training Room 3, where you will calculate the net income or net loss and assure that all debits equal credits to complete the worksheet.