Accounting Knowledge: Working Papers

The concept of working papers

The so-called work paper refers to a multi-purpose accounting information collection, analysis and calculation table.

During an accounting period, the accounting process analyzes accounting items, compiling accounting entries, posting, adjusting the relevant accounts, preparing the trial balance after adjusting accounts, and then formulating the checklist after clearing the temporary accounts, and then preparing the accounting statements.

This completes the accounting work during an accounting period, and provides accounting information that reflects the state of business activities in the accounting period.

For businesses that are small and simple, the above requirements are not difficult, but for those businesses that are complex and accounting matters happen frequently, it is not easy.

At the end of accounts, the adjustment of accounts, checkout, trial balance and other work are more concentrated, and the contents are scattered. So it is inevitable to make mistakes when entering accounts, and it is time-consuming and laborious when searching, which is not conducive to the timely and accurate preparation of accounting statements.

So the working papers came into being.

The role of working papers

The working papers are compiled at the end of the accounting period, which is conducive to the timely determination of the operation of the enterprise.

The specific functions are as follows:

1., it is possible to avoid errors in the adjustment and settlement of accounts.

At the end of the accounting period, adjustment of accounts, checkout, trial balance and so on are carried out in a decentralized manner, and the workload is heavy.

Sometimes it is difficult to detect corrections even if there are errors.

By working out the working papers, each working procedure is carried out on the same form, so that it is easy to concentrate on finding errors, and the checkout and adjustment entries on the working papers can be used as the basis for making account vouchers and adjusting account records. The work saves time and effort, ensures the cleanliness of account books, and avoids errors in adjustment and settlement accounts.

2., it can reflect the financial results of the business period in time.

In the work papers, by adjusting accounts, carrying out entries, trial balance, the enterprise in the accounting period occurred

3., help to speed up the compilation of accounting statements.

There are profit and loss statements and balance sheets in the working papers. The columns in these two tables can be directly compiled according to the daily accounting books.

The daily account books scattered reflect the relevant factors of operation and financial status of enterprises. Before compiling accounting statements, these projects must balance the trial balance on the basis of account adjustments. This will take a certain time and will affect the timely compilation of accounting statements.

Compiling work papers, which is combined with account adjustment, trial balance, checkout and compiling accounting statements, is concentrated on the same work paper. This reduces the compilation of information before preparing accounting statements, and helps to speed up the compilation of accounting statements.

Format of working papers

The format of working papers varies with their uses.

Here is the checkout work paper compiled at the end of the accounting period.

This work paper usually adopts checkerboard format.

The columns in the table are arranged according to the order of accounting process, including trial balance, account adjustment, account pfer, accounting statement and so on.

In practical work, the format of working papers is as follows:

1. "six column" format

The "six column" working paper contains "trial balance before adjustment", "account adjustment" and "table adjustment".

2. "five column" format

The "five column" working paper is based on the "six column" formula, and is omitted from the "adjusted table" column.

3. "four column" format

The working column of "four column" format only consists of four columns: "adjustment before trial", "account adjustment", "profit and loss statement" and "balance sheet".