Accounting - Preparing an 8-Column Work Sheet for a Merchandising Business

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Recording adjustments on a work sheet brings the general ledger accounts up to date.

Generally accepted accounting principles require that corporations charge 1% of credit sales as an adjustment for uncollectible accounts.

A work sheet should be prepared only once a year.

Annual straight-line depreciation expense of a plant asset is calculated as the original cost of the plant asset divided by the years of estimated useful life.

All accounts are listed on the work sheet regardless of whether there is a balance or not.

Purchases are recorded in the merchandise inventory account.

Estimated income tax must be paid in quarterly installments.

A net income amount is extended to the Balance Sheet Credit column.