Introduction to Accounting 120 Mr. Binet  Moncton High School Class #13: Creating a Balance Sheet – Formatting and Rules
<ul><li>We will go over proper formatting and setting up of a balance sheet. </li></ul><ul><li>We will discuss “accounting...
<ul><li>The final section of the balance sheet is the Owner's Equity section. This area displays the owner's net worth, th...
<ul><li>Avoid using abbreviations unless required due to space or unless the abbreviation is part of the formal name of a ...
<ul><li>The advent of computers has largely eliminated the need to hand-record data; however, companies will still use  co...
<ul><li>Like the use of columnar paper, the use of dollar signs has diminished as more businesses and organizations utiliz...
<ul><li>It is most important that an accountant's work be neat and legible. If work is difficult to read, numbers may be m...
Review of the Steps…
<ul><li>Read Section 2.2 (pg. 20 – 27) in the textbook. </li></ul><ul><li>On the O:Binet drive, open the “Section 2.2 Revi...
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Acct120 Class #13 Creating A Balance Sheet Formatting And Rules

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Acct120 Class #13 Creating A Balance Sheet Formatting And Rules

  1. 1. Introduction to Accounting 120 Mr. Binet Moncton High School Class #13: Creating a Balance Sheet – Formatting and Rules
  2. 2. <ul><li>We will go over proper formatting and setting up of a balance sheet. </li></ul><ul><li>We will discuss “accounting” rules for abbreviations, how to prep a balance sheet, when to use dollar signs, etc. </li></ul><ul><li>Textbook questions! </li></ul>In Today’s Class…
  3. 3. <ul><li>The final section of the balance sheet is the Owner's Equity section. This area displays the owner's net worth, the value of which is determined using the fundamental accounting equation. Once the fundamental equation is completed, the financial statement is totaled to ensure it &quot;balances.&quot; </li></ul><ul><li>Review the following diagram for formatting of the Owner's Equity section and totaling of an account form balance sheet. </li></ul>Owners Equity!
  4. 4. <ul><li>Avoid using abbreviations unless required due to space or unless the abbreviation is part of the formal name of a business. </li></ul><ul><li>If a company's formal name is NB Creations Limited, avoid recording NB Creations Ltd.; however, if the formal name is NB Creations Ltd., this abbreviated form is used. In short, record it as it is presented unless spacing requires change. </li></ul><ul><li>Total Owner's Equity and Liabilities is a long description to enter on a balance sheet. If necessary, an abbreviated entry would be acceptable: Total Owner's Equity & Liab. </li></ul>Avoid Using Abbreviations
  5. 5. <ul><li>The advent of computers has largely eliminated the need to hand-record data; however, companies will still use columnar paper for certain tasks. Columnar paper is specifically designed to record numbers. Each number or set of numbers is provided with its own &quot;slot.&quot; This helps the accountant total the columns accurately. </li></ul><ul><li>Review how the following list of numbers is recorded using columnar paper: </li></ul><ul><ul><li>14.62, </li></ul></ul><ul><ul><li>195.35, </li></ul></ul><ul><ul><li>50.00, </li></ul></ul><ul><ul><li>32 567.12 </li></ul></ul><ul><li>Note: Placing a dash in the column indicates an even cents amount (00 may be used if preferred). </li></ul><ul><li>There is no use of commas or decimal points. </li></ul>Columnar Paper
  6. 6. <ul><li>Like the use of columnar paper, the use of dollar signs has diminished as more businesses and organizations utilize pre-formatted software applications to complete accounting tasks. </li></ul><ul><li>There are also some variations in the procedures followed when completing financial statements by hand; some companies use dollar signs, others don't. </li></ul><ul><li>When using dollar signs: </li></ul><ul><li>There should always be two (and only two) dollar signs in a column of figures, one dollar sign next to the first financial figure of a column and one dollar sign with the final total of that same column. </li></ul><ul><li>The dollar signs should be aligned. </li></ul>Dollar Signs
  7. 7. <ul><li>It is most important that an accountant's work be neat and legible. If work is difficult to read, numbers may be misinterpreted. Computers have largely eliminated this concern; however, companies will always complete some tasks by hand. </li></ul><ul><li>Erasing </li></ul><ul><li>Accountants do not erase. When accountants make a handwritten error, they draw a line through the incorrect data and record the correct information above: </li></ul><ul><li>1 225.60 </li></ul><ul><li>1 252.60 This is a basic control mechanism. It enables someone to see the honesty of the mistake and removes doubts one may have regarding employee or company fraudulence. </li></ul>Neatness and Error Correction
  8. 8. Review of the Steps…
  9. 9. <ul><li>Read Section 2.2 (pg. 20 – 27) in the textbook. </li></ul><ul><li>On the O:Binet drive, open the “Section 2.2 Review.doc” and in groups of 2 or individually, answer questions 1-17. Save this file on your U: drive. </li></ul><ul><li>Once you are done this, open the Microsoft Excel file named “Section 2.2 Exercises.xls” and in groups of 2 or individually complete exercises 1-3 on page 26 (note – use a new worksheet, bottom tabs, for each question). Save the file on your U: drive. </li></ul><ul><li>When both assignments are completed, e-mail them to me: [email_address] – with the subject “Section 2.2 Review and Exercises”. </li></ul>Today’s Assignment

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