The Accounting Cycle
The accounting cycle is
the process or sequence of accounting procedures that takes place during
the accounting period from the occurrence and recording of the business
transaction to the preparation of the financial statements.
The primary purpose of
the accounting cycle is to ensure that all transactions are properly and
correctly recorded and records maintained so that the financial
statements can be prepared at the end of each accounting period. The
bookkeeper and accountant are primarily responsible for the accounting
cycle. The accounting cycle is shown in the steps below.
1.
Business
Transaction Occurs
2.
Source Document
is Prepared
3.
Transaction is
recorded In Journal
4.
Amounts posted
to Ledger
5.
Trial Balance
Prepared
6.
Financial
Statements Prepared
|
