Accounting Cycle

Accounting Cycle

Learning Objective:

  1. 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

Accounting Cycle

 

You may also be interested in other articles from “bookkeeping chapter” chapter:

  1. Definition and Explanation of Bookkeeping
  2. Important Bookkeeping Terms
  3. Double Entry System of Bookkeeping
  4. Single Entry Vs Double Entry System of Bookkeeping
  5. Definition and Explanation of Accounting
  6. Branches of Accounting
  7. Functions of Accounting
  8. Parties Interested in Accounting Information
  9. Systems of Accounting – Cash System of Accounting and Accrual System of Accounting
  10. Bookkeeping Vs. Accounting/Difference Between Bookkeeping and Accounting
  11. Accounting Cycle

Learning Objective:

  1. 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

Accounting Cycle

 

You may also be interested in other articles from “bookkeeping chapter” chapter:

  1. Definition and Explanation of Bookkeeping
  2. Important Bookkeeping Terms
  3. Double Entry System of Bookkeeping
  4. Single Entry Vs Double Entry System of Bookkeeping
  5. Definition and Explanation of Accounting
  6. Branches of Accounting
  7. Functions of Accounting
  8. Parties Interested in Accounting Information
  9. Systems of Accounting – Cash System of Accounting and Accrual System of Accounting
  10. Bookkeeping Vs. Accounting/Difference Between Bookkeeping and Accounting
  11. Accounting Cycle

Other Related Accounting Articles:

Recommended Books !



Or

Download E accounting book in MS-word format for just 20 $ - Click here to Download


Leave a Reply

Your email address will not be published. Required fields are marked *