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The Importance and Usefulness of the Accounting Cycle

Please discuss the value of the accounting cycle to a company including:

Normal length of the cycle
Integration with required governmental reporting
Computer software verses handwritten records
Level of education and expertise in the steps of the cycle
Applying the cycle to manufacturing as well as retail and service companies

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Understanding the importance and usefulness of the completion of the accounting cycle.

The accounting cycle includes the process of recording and processing various accounting events within a company to produce complete and accurate financial information to managers, owners and investors. The accounting cycle is given in steps which also represent the order in which the process unfolds. Although there are sometimes a difference number of steps, the normal list includes 7 to 9 steps to complete the circle. Then the process begins over again in the next accounting period.

What is the value of the completion of the steps in the accounting cycle?

Completing all the steps provides an entity with sufficient financial information which is invaluable in running a company. The results are commonly used both inside and outside the company for various purposes. The analysis of the completed financial statements will allow managers instant information for making ongoing ...

Solution Summary

The 613 word solution provides good explanations in response to each of the discussion statements concerning the value and application of the accounting cycle.