The accounting cycle 07032013

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The accounting cycle 07032013

  1. 1. The Accounting Cycle 3 July 2013
  2. 2. Steps in the Accounting Cycle • Analyzing business transactions through source documents (business documents) • Business Transactions? Personal Transactions? • Effect on the basic accounting equation?
  3. 3. Steps in the Accounting Cycle  › Journalizing, or the recording of transactions in a Journal or Book of Original Entry
  4. 4. Sample of a Journal
  5. 5. Steps in the Accounting Cycle  Posting, or transferring of the account from the Journal to the Ledger or the Book of the Final Entry
  6. 6. Standard Form Running Balance Form
  7. 7. Steps in the Accounting Cycle  Balancing of the accounts and preparation of the trial balance  Trial Balance - a list of account balances taken from the ledger
  8. 8. Steps in the Accounting Cycle  Preparation of the 10-column worksheet  Journalizing and posting adjusting entries  Preparation of the financial statements based on adjusted balances  Recording and posting of closing entries
  9. 9. Steps in the Accounting Cycle  Balancing and preparing a Post-Closing Trial Balance from the list of open account balances taken from the ledger  Preparation of the reversing entries for certain adjusted accounts to enable the business to maintain the same method of recording certain transactions from one period to another. This is optional.

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