Accounting Cycle:
Learning Objective:
-
Define and explain accounting
cycle.
Accounting cycle refers to a complete
sequence of accounting procedures which are required to be repeated in same
order during each accounting period. Accounting cycle includes:
Recording:
First, all transactions should be recorded
in the journal or books of original entry known as subsidiary books as and
when they take place. Classifying:
All entries in the journal of books of
original entry should be posted to the appropriate ledger accounts to find
out at a glance the total effect of all such transactions in a particular
account. Summarising:
Last stage is to prepare the trial balance
and final accounts with a view to ascertaining the profit or loss made
during a trading period and the financial position of the business of a
particular date.
Accounting Cycle
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