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What is the accounting cycle????

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Jul 22 '19 at 19:6:8

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Definition of Accounting Cycle
The accounting cycle is often described as a process that includes the following steps:

Identifying, collecting and analyzing documents and transactions

Recording the transactions in journals

Posting the journalized amounts to accounts in the general and subsidiary ledgers

Preparing an unadjusted trial balance and perhaps preparing a worksheet

Determining and recording adjusting entries

Preparing an adjusted trial balance

Preparing the financial statements

Recording and posting closing entries

Preparing a post-closing trial balance

Recording reversing entries

Accounting Cycle Today
The above steps were clear in a manual accounting system. However, today these steps are occurring with electronic speed and accuracy within sophisticated yet inexpensive accounting software. The accountant can enter adjusting entries into the software and can instantaneously obtain a complete set of financial statements by simply selecting them from a menu. After reviewing the financial statements, the accountant is able to make additional adjustments and almost immediately obtain the revised reports. The software will also prepare, record, and post the closing entries. It will also reverse adjusting entries that have been designated to be reversed.
Jul 22 '19 at 19:17:27
5 months ago
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