Wednesday, 30 January 2019

Accounting Cycle Steps - Examples & PDF

Introduction to Accounting Cycle

Accounting Cycle
The accounting cycle is the process of provision of financial statements of the company for a certain period of time. This cycle starts from the occurrence of the transaction, to the preparation of the financial statements at the end of a period.

Stages Of The Process Of Accounting Cycle

The accounting cycle can be grouped in several stages, among others:

1. The stage of Recording Evidence of financial transactions:

A process to collect and record evidence of a transaction that has been approved by the company and compiled into the Public Journal or diary, book over or post from general journal based on the Chart of accounts or groups of accounts or type into account Ledgers and books Maid (Sub Ledger).

2. Stages of Creating an overview of the financial statements:

Preparation of balance sheet balances (Trial Balance) based on data from the great book of account account. The making of verse journal adjustments (Adjustment Entries). Preparation of sheets of paper work (Work Sheets) or balance sheet columns. The making of verse Journal closing (Closing Entries).

3. The stage of Creating the financial statements or Financial Statements

The financial statements of the company consists of:
  • A. Report balance sheet (Balance Sheets): The balance sheet is a financial report that shows summary position of Assets or Assets, debts or Liabilities, and capital or Equity
  • Report of the Loss of profit (Income Statements): Profit Loss report is a financial report from a company that generated at a certain period that consists of the entire revenue and burden resulting profit or loss value.
  • Report of the change in capital (Equity Statements): Capital Changes report is a financial report from summary that records information about the change of capital, which consists of the amount of initial paid-in capital (Capital Stock), additional paid-in capital (Paid-in Capital), the balance Profit Period Runs (Current Earning Profit and balance), Detained (Retained Earning)
  • The report of the cash flows (Cash Flow Statements): Cash flow statement is part of the company's financial reports are generated from an accounting period consisting of cash flow of funds in and out, which is usually grouped by the cash flow from Operating Activities, Investment Activities, and Funding Activity.
  • Notes to financial statements.: Notes to financial statements are additional reports record more detailed information regarding a particular account and provide a more comprehensive assessment of the conditions of the financial statements of the company.

Accounting cycle example 01

Accounting cycle example 01

Accounting cycle example 02

Accounting cycle example 02


1 comment:

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