Accounting Cycle www.soopertutorials.com

Agenda Accounting Cycle Recording transactions in the journal Post to ledgers account Preparing a trial balance Preparation of financial statements

Accounting Cycle

Recording transactions in the journal

Post to ledgers account

Preparing a trial balance

Preparation of financial statements

Accounting Cycle Accounting cycle is a sequence of accounting procedures which are used to record, classify and summarize accounting information.

Accounting cycle is a sequence of accounting procedures which are used to record, classify and summarize accounting information.

Recording transactions in the journal The first step of accounting cycle is recording transactions in the ledger. As any type of business transaction occurred; they are entered in the journal, thus creating sequential record of events. This procedure completes the recording step in the accounting cycle.

The first step of accounting cycle is recording transactions in the ledger. As any type of business transaction occurred; they are entered in the journal, thus creating sequential record of events. This procedure completes the recording step in the accounting cycle.

Post to ledgers account The debit and credit entries in account balances are posted from journal to the ledger. This procedure classifies the effects of the business transactions on terms of specific asset, liability, owner’s equity, revenue and expense accounts.

The debit and credit entries in account balances are posted from journal to the ledger. This procedure classifies the effects of the business transactions on terms of specific asset, liability, owner’s equity, revenue and expense accounts.

Preparing a trial balance A trial balance proves and authenticates the equality of debit and credit entries in the ledger. The purpose of this procedure is to verify the accuracy of posting process and the computation of the ledger account balances. In the nut shell debit and credits sides are balanced at the end in the trial balance.

A trial balance proves and authenticates the equality of debit and credit entries in the ledger. The purpose of this procedure is to verify the accuracy of posting process and the computation of the ledger account balances. In the nut shell debit and credits sides are balanced at the end in the trial balance.

Preparation of financial statements The final step of accounting cycle is to extract figures from trial balance which are then summarized up to prepare the financial statements. These financial statements demonstrate the position of the business at the specific date

The final step of accounting cycle is to extract figures from trial balance which are then summarized up to prepare the financial statements. These financial statements demonstrate the position of the business at the specific date

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