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    The Accounting Cycle

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    Select a company you are familiar with. Explain each step of the accounting cycle. Describe at least one transaction that would occur at the company you selected in each of these steps.

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    Accounting cycle: The sequence of accounting procedures used to record, classify, and summarize accounting information. The cycle begins with the initial recording of business transactions and concludes with the preparation of formal financial statements.

    From a manager's point of view, basic financial statements should be prepared in a timely fashion so any unexpected trends in revenues and expenses can be detected and addressed. Most businesses find monthly statements adequate, although firms operating under very stable economic conditions find quarterly or annual financial statements sufficient.
    Compiling and preparing financial statements usually requires making adjustments to general ledger account balances. For example, it is customary to analyze accounts ...

    Solution Summary

    The sequence of accounting procedures used to record, classify, and summarize accounting information is discussed in this 512 word solution, which includes figures to enhance understanding of the problem.

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