Daffodil International University

Faculties and Departments => Business Administration => Business & Entrepreneurship => BBA Discussion Forum => Topic started by: shahanasumi35 on April 01, 2014, 07:57:23 PM

Title: Accounting Cycle
Post by: shahanasumi35 on April 01, 2014, 07:57:23 PM

      
Accounting Cycle

Accounting cycle is a step-by-step process of recording, classification and summarization of economic transactions of a business. It generates useful financial information in the form of financial statements including income statement, balance sheet, cash flow statement and statement of changes in equity.

The time period principle requires that a business should prepare its financial statements on periodic basis. Therefore accounting cycle is followed once during each accounting period. Accounting Cycle starts from the recording of individual transactions and ends on the preparation of financial statements and closing entries.
Major Steps in Accounting Cycle

Following are the major steps involved in the accounting cycle. We will use a simple example problem to explain each step.

    Analyzing and recording transactions via journal entries
    Posting journal entries to ledger accounts
    Preparing unadjusted trial balance
    Preparing adjusting entries at the end of the period
    Preparing adjusted trial balance
    Preparing financial statements
    Closing temporary accounts via closing entries
    Preparing post-closing trial balance





      

Title: Re: Accounting Cycle
Post by: munna99185 on April 04, 2014, 01:23:47 PM

Informative post.


Sayed Farrukh Ahmed
Assistant Professor
Faculty of Business & Economics
Daffodil International University

Title: Re: Accounting Cycle
Post by: taslima on April 05, 2014, 12:59:05 PM

nice

Title: Re: Accounting Cycle
Post by: shahanasumi35 on April 09, 2014, 07:49:51 PM

Thanks to all.

Title: Re: Accounting Cycle
Post by: Md. Al-Amin on April 13, 2014, 02:45:55 PM

A businessman should make a harmony between accounting cycle and practical cycle of his business.

Title: Re: Accounting Cycle
Post by: sajib on April 16, 2014, 04:42:37 PM

The sequence of six steps in the processing of financial transactions (from the time they occur to their inclusion in financial statements) pertaining to an accounting period. These steps are: (1) analyzing the transactions as they occur, (2) recording them in the journals, (3) posting debits and credits from journal entries to the general ledger, (4) adjusting the assets with a trial balance, (5) preparing financial statements, and (6) closing the temporary accounts.