Spreadsheet Walkthrough: Chapters 1–4 (No LedgerLoom)

This page is a practical “how-to” for completing Chapters 1–4 in a spreadsheet.

The goal is to produce the same artifacts LedgerLoom will later verify:

  • Unadjusted Trial Balance

  • Adjusted Trial Balance

  • Closing Entries

  • Post-close Trial Balance

Optional template (download): LedgerLoom Workbook spreadsheet template (XLSX)

Optional CSV-aligned template (download): LedgerLoom Workbook CSV-aligned template (XLSX)

Chapter 1 — Transactions (Journal)

Step 1: Enter transactions as journal entries

In Journal_Transactions, record each transaction using:

  • Date

  • EntryID

  • Memo

  • Account

  • Debit

  • Credit

Check every EntryID balances.

Quick balance check (spreadsheet idea)

Make a small summary table (or pivot) grouped by EntryID:

  • TotalDebit = SUM of Debit

  • TotalCredit = SUM of Credit

  • Difference = TotalDebit - TotalCredit

Every Difference must be 0.

Common beginner mistakes

  • Putting the amount in both Debit and Credit on the same row.

  • Misspelling an account name (COA prevents this).

  • Forgetting one line of a multi-line entry.

Chapter 2 — Journal → Unadjusted Trial Balance

A trial balance is a list of accounts with their debit/credit balances.

Step 1: Build account totals from the journal

In TB_Unadjusted, list every account from the COA. Then compute totals from the journal.

A simple approach is to compute two totals per account:

  • DebitTotal = sum of all journal debits for that account

  • CreditTotal = sum of all journal credits for that account

Excel-style formulas (conceptual)

If your journal is in a table named Journal with columns Account, Debit, Credit:

  • DebitTotal: SUMIFS(Journal[Debit], Journal[Account], [@Account])

  • CreditTotal: SUMIFS(Journal[Credit], Journal[Account], [@Account])

Then compute the trial balance presentation:

  • If DebitTotal > CreditTotal, the account has a Debit balance

  • If CreditTotal > DebitTotal, the account has a Credit balance

Step 2: Prove the TB balances

At the bottom:

  • TotalDebits = SUM(DebitBalanceColumn)

  • TotalCredits = SUM(CreditBalanceColumn)

These must match exactly.

Chapter 3 — Adjusting Entries → Adjusted Trial Balance

Adjusting entries record accruals and deferrals (they usually happen at period end).

Step 1: Record adjusting entries

In Journal_Adjustments, record entries in the same journal format. Use EntryIDs like A001, A002, etc.

Each adjusting entry must balance.

Step 2: Create TB_Adjusted

In TB_Adjusted, start from the unadjusted TB, then apply adjustments.

A clean method:

  • Compute AdjustmentDebitTotal per account from Journal_Adjustments

  • Compute AdjustmentCreditTotal per account from Journal_Adjustments

  • AdjustedDebitTotal = UnadjustedDebitTotal + AdjustmentDebitTotal

  • AdjustedCreditTotal = UnadjustedCreditTotal + AdjustmentCreditTotal

Then recompute the Debit/Credit balance presentation and re-check totals.

Checkpoint: what changed?

At this stage you should be able to answer:

  • Which accounts changed due to accrual accounting?

  • Why did they change?

  • Did any cash account change due to adjustments? (Usually no.)

Chapter 4 — Closing Entries → Post-close Trial Balance

Closing transfers temporary account balances into equity and resets them to zero.

Temporary vs permanent accounts

Temporary (should go to zero after close):

  • Revenue

  • Expense

  • Dividends/Draws (depending on the course)

Permanent (remain after close):

  • Assets

  • Liabilities

  • Equity accounts (including Retained Earnings)

Step 1: Compute net income (from the adjusted TB)

Net Income = Total Revenues - Total Expenses

(Your spreadsheet may compute this directly from the TB.)

Step 2: Create closing entries

In the Closing tab, create entries that:

  1. Close revenues to Retained Earnings (or Income Summary, depending on course design)

  2. Close expenses to Retained Earnings (or Income Summary)

  3. Close dividends/draws directly to Retained Earnings (not to income summary)

Important concept

  • Revenues normally have credit balances.

  • Expenses normally have debit balances.

So your closing entries will usually: - Debit revenue accounts to bring them to zero - Credit expense accounts to bring them to zero - Move the net amount into equity

Step 3: Build the Post-close TB

Create TB_PostClose by applying closing entries to the adjusted TB.

The post-close TB should contain only balance sheet accounts.

Final invariant check

  • Total Debits = Total Credits

  • Revenue / Expense / Dividends-or-Draws accounts should be zero (or absent)

Why this matters before LedgerLoom

If you can produce these tables in a spreadsheet:

  • you understand the accounting cycle,

  • you can interpret what LedgerLoom outputs,

  • and you can quickly diagnose errors when LedgerLoom flags something.

LedgerLoom is not the answer engine — it’s the verifier.