Can you please describe to me in detail the steps of the accounting cycle? please include references searched the solution library and need new information.
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can you please describe to me in detail the steps of the accounting cycle? please include references searched the solution library and need new information.
The steps in the accounting cycle are
1. Analyze Transaction
2. Journalize transaction
3. Post to ledger
4. Identify, journalize and post adjusting entries
5. Prepare financial statements
6. Journalize and post closing entries
The first step is analysis of the transaction. In this step we ascertain if the transaction should be recorded in the books of the company. Under the entity concept only those transactions are recorded which are done with the business. Under the monetary measurement concept only those transactions are recorded which can be objectively expressed in monetary terms. After the analysis we decide that the transaction is to be recorded in the books. Once the decision is made to record the transaction, we need to identify the accounts and the amounts to include.
The next step is journalize transactions. In this step we prepare the journal entry which shows the accounts and the amounts involved in the transaction. The journal is a paper document which also serves as a record of the transactions. Any source documents such as invoices or bills are attached to the journal so that later these can be ...
The solution explains the steps in the accounting cycle