Accounting Cycle Paper

When making decisions, businesses must bring home the bacon and be able to gather relevant and accurate pecuniary information. being able to gather and understand this information helps companies make the best conscious decisions for business operations, which can only benefit the familiarity. When it comes to gathering the information needed, it is liable(p) that companies fully understand each graduation of the accounting bike.Averkamp (2010) defines the accounting pass as a demonstrate that includes the following travel identifying, collecting and analyzing documents and transactions, record the transactions in records, posting the journalized amounts to accounts in the general and subsidiary playscripts, preparing an maladjusted exertion balance, mayhap preparing a worksheet, determining and recording adjusting entries, preparing an adjusted attempt balance, preparing the fiscal statements, recording and posting death entries, preparing a post-closing trial bala nce, and perhaps recording reversing entries (p. ).The accounting speech rhythm is do op of eight basic flavours witch include The basic steps in the accounting round are (1) identifying and measuring rod transactions and other events (2) journalizing (3) posting (4) preparing an unadjusted trial balance (5) making adjusting entries (6) preparing an adjusted trial balance (7) preparing financial statements and (8) closing. Identifying and measuring transactions and other events The first step in the accounting cycle is determining what information that should be recorded.Kieso, Weygandt & Warfield (2007) explain that items should be recognized if, it is an element, is measurable, and is relevant and reliable (p 68). Companies are able to recognize as many relations as they wish, especi entirelyy if they feel that these dealings will affect the financial position of the company. Journalizing Journalizing includes entering the financial transactions and events into a journal. As opus of the journalizing process general ledger, t-accounts, and general journals are used.Kieso, Weygandt & Warfield (2007) explain that the general ledger contains all the assets, liability, stockholders honor, revenue, and expense accounts (p 69). T-accounts are used to visualize the affects of the debit and credit entry on more then one account. A general journal chronologically lists transactions and other events, expressed in terms of debits and attribute to accounts (Kieso, Weygandt & Warfield, 2007, p 69). Posting Posting, defined by Kieso, Weygandt & Warfield (2007) is the process of transferring journal entries to the ledger accounts.The general ledger provides information for the fit Sheet . Trial Balance The trial balance step in the accounting cycle is the process of totaling the debits and credits and making received that the sum of all debits equals the sum of all credits. Kieso, Weygandt & Warfield (2007), state that the procedures for preparing a trial balance includes, listing the account titles and their balances totaling the debit and credit columns and providing the equality of the two columns (p. 74).Adjusting Entries Adjusting Entries are journal entries that are made at the end of the accounting flow rate, to adjust expenses and revenues to the accounting plosive where they real occurred (Cram, 2011, p 1). Adjusting entries are required every time the company drums financial statements. Adjusting entries can be classified as prepayments or accruals. The purpose for this step in the accounting cycle is to determine the net income for the current period and to achieve an accurate statement of the end-of-the-period balance in assets, liabilities, and owners equity (Kieso, Weygandt & Warfield, 2007). alter trial balance The next step in the accounting cycle is the step adjusted trial balance. This step is important because it is where companies make sure that the debits still equal the credits after making the adjustments in the antecedent step. Kieso, Weygandt & Warfield (2007) explain that, It shows the balance of all accounts, including those adjusted, at the end of the accounting period (p. 84). Preparing Financial StatementsThe seventh step in the accounting cycle is where the company would prepare the financial statements from the second trial balance. Closing The last step in the accounting cycle is closing entries. This is where companies prepare and post closing entries in order to transfer balances from temporary accounts to owners equity on the balance sheet. This step reduces the balance of normal accounts to zero to prepare the accounts for the next periods transactions (Kieso, Weygandt & Warfield, 2007).Referenceshttp//www.college-cram.com/study/accounting/accounting-cycle/adjusting-entries-in-accounting/