Business / Accounting Cycle
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Autor: ebonywoman 21 February 2012
Words: 741 | Pages: 3
Monday, January 23, 2012
The "accounting cycle is arranged get of rules to secure precise and conformity of financial statements. Computerized accounting systems have helped to greatly reduce mathematical errors in the accounting process, but the uniform process of the accounting cycle also helps reduce mistakes"(Accounting, 2011). This paper will explain the overall accounting cycle at the organization you work at. Another thing that this paper will discuss the description of the people, processes, and systems that age integral to the cycle.
The accounting cycle is a rational range of numbers of steps that accountants go by to keep requisite accounting records and prepare financial statements. The organization that I am employed with the first two steps of the accounting cycle is almost the same and is skilled during the month as transactions occur.
Step 1: includes arranging business transactions into an proper number of debits and credits to be put on the accounting records.
Step 2: is the second step in the accounting cycle is journalizing, dealing with General Journal, in the organization recording or encoding this transaction (cash receipts, debits, and purchases in the journal) for in the future positing to the general ledger.
Step 3: involves posting journal entries to the general ledger in the accounting cycle, usually successfully completed at the end of each month which is creating the trial balance. If there is no journal is provided, transaction s would easily be displayed to the ledger as they come up.
Step 4: deals with adjustments entries to the general ledger and prepayments and estimated items.
Step 5: within the accounting cycle deals with the adjusted trial balance, we have adjust the balance and times within the months and the years.
The reason why we do that is to make sure that debits are even credits. The trial balance lists accounts and their balances at a giving time. At this giving time no adjusting entries have been made. The trial balance lists the accounts in the order in which they appear in the ledger, with debit balances listed in the left column and credit balances in the right column. The two columns have to agree and equal at this time they are meaningful, the very important is that the sums equal within the two columns. A brief record "that while out-of-balance columns point out a recording error, balanced columns do not provide a formal assurance that there are no errors"(Vice President, 2012). For example, if we do not record a transaction or put the transaction in the wrong place or in the wrong account would not cause a misbalance. We as an organization should correct any incompatibility in the trail balance. When we do the columns we should see if the columns do not equal up or balance, we glance for errors, posting errors, and recording errors. Posting errors include:
• Posting of the wrong amount
• Omitting a positing
• Posting in the wrong column or
• Posting more than once
Prepare the financial statements
The income statements shows the revenue and charge, account balances at the end of an accounting period, and reflects income and expense over the entire accounting period.
Balance sheet: created from assets, liabilities, and equity accounts.
Statements of retained earnings: created from net income and owners equity, equity statement or statement of shareholders equity.
Cash flow statement: obtained from the other financial statements using either the direct or indirect method.
The cash flow statement allows us to understand how our organization is running, where our money is coming from, and how it is being spent.
Prepare graphic illustration of financial data
We deal with the maintenance, review analysis and development of the accounting systems, and the data base we have an employee evaluation the accounting systems. Another thing the employee does is assist in the planning and development of new or revised manual and EDP systems.
The process that are involved in the accounting cycle
Those processes that we do is electronically, which is billing, and the dues from conferences that we do every so often from using those process we do not have to reenter the data electronically to our accounting systems.
By using the accounting cycle that helps us with new employees and help the employees work better. With the organization I am with is small so we are still working on our systems to help our organization work well than it is.
Accounting, (2011). Accounting Cycle. Retrieved Saturday, January 21, 2012 from http://www.investopedia.com/terms/a/accounting-cycle.asp#axzz1kK11EkAB
Assistant Vice President, (2012). What is Accounting Cycle? Retrieved Sunday, January 22, 2012 from http://www.smallbusinessforum.com/showthread.php?16727-What-is-accounting-Cycle&p=49989
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