The Accounting Cycle
The Accounting Cycle
Presented to
Ms. Aisha Meeks
Department of Business Management
College of Business Administration
Alabama State University
In Partial Fulfillment of the Requirements for the Course
ACT.214.04
By
Krystal Hall
January 26, 2013
Memo:
To: Ms. Aisha Meeks
From: Krystal Hall
Date: 2/26/2013
Re: The Accounting Cycle
Every company has an accounting cycle. An Accounting cycle is the process that begins with analyzing and journalizing transactions and it ends with the post-closing trial balance. When preparing the accounting cycles there are ten steps that are included. They are as follow; transactions are analyzed and recorded in the journal, posted to the ledger, an unadjusted trial balance is prepared, adjustment data are assembled and analyzed, an optional end-of-period spreadsheet is prepared, adjusting entries are journalized and posted to the ledger, an adjusted trial balance is prepared, financial statement are prepared, closing entries are journalized and posted to the ledger, and post-closing trial balance is prepared. In this paper I will be explaining the overall accounting process and describe the steps most business take when preparing the accounting cycle. All four of these different statements play critical roles in the accounting process for companies. Without one of them, a company can easily go wrong in managing the inflow and outflow of their money.
Analyze and Recording Transactions in the Journal
The first step in the accounting cycle is to analyze and record transactions in the journal using the double-entry accounting system. A double-entry accounting system is a set of rules for recording financial information in a financial accounting system in which every transaction or event changes at least two different nominal ledger accounts. In the double-entry accounting system, each accounting entry records related pairs of financial transactions for asset, liability, income, expense, or capital accounts.
Presented to
Ms. Aisha Meeks
Department of Business Management
College of Business Administration
Alabama State University
In Partial Fulfillment of the Requirements for the Course
ACT.214.04
By
Krystal Hall
January 26, 2013
Memo:
To: Ms. Aisha Meeks
From: Krystal Hall
Date: 2/26/2013
Re: The Accounting Cycle
Every company has an accounting cycle. An Accounting cycle is the process that begins with analyzing and journalizing transactions and it ends with the post-closing trial balance. When preparing the accounting cycles there are ten steps that are included. They are as follow; transactions are analyzed and recorded in the journal, posted to the ledger, an unadjusted trial balance is prepared, adjustment data are assembled and analyzed, an optional end-of-period spreadsheet is prepared, adjusting entries are journalized and posted to the ledger, an adjusted trial balance is prepared, financial statement are prepared, closing entries are journalized and posted to the ledger, and post-closing trial balance is prepared. In this paper I will be explaining the overall accounting process and describe the steps most business take when preparing the accounting cycle. All four of these different statements play critical roles in the accounting process for companies. Without one of them, a company can easily go wrong in managing the inflow and outflow of their money.
Analyze and Recording Transactions in the Journal
The first step in the accounting cycle is to analyze and record transactions in the journal using the double-entry accounting system. A double-entry accounting system is a set of rules for recording financial information in a financial accounting system in which every transaction or event changes at least two different nominal ledger accounts. In the double-entry accounting system, each accounting entry records related pairs of financial transactions for asset, liability, income, expense, or capital accounts.
References: Warren, Reeve, and Jonathan E. Duchac. Accounting 24e, China, 2009-2012. Print.