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Each step of the accounting cycle with a transaction

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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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Response explains each step of the accounting cycle with a transaction

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Accounting Cycle Paper

I have taken the company known as ShyamExports. As per quickmba.com, Accounting cycle means "The sequence of activities beginning with the occurrence of a transaction is known as the accounting cycle." As per Netmba.com "The accounting process is a series of activities that begins with a transaction and ends with the closing of the books."

Hence accounting cycle starts from recording of transaction then preparation of financial statements. This involves preparing accounting entries for each transaction and goes through closing the books. Let us understand the steps of accounting cycle:

1) Identify the Transaction

The transactions would be identified from the source documents. Source documents are those documents which provide evidence to the transaction. Few examples of source documents include a receipt, an invoice, check book and a bank statement. The amount of the transaction and accounts of the transaction are identified.

2) Journalize the transaction

This will require recording the accounts either on debit side. For example, a company paid salary. In the Cash Payments Journal, you would debit Salary and credit Cash. ...

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