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11/28/15

The Accounting Cycle

Which of the necessary job skills, do you feel you and is the strongest? As the book-mentioned engagement, perform the task of accounting cycle, to complete the work. For accounting workflow is circular, it has been referred to as the cycle: Enter the transaction, operates the transaction through the accounting cycle, close the book at the end of the accounting period, and then, all again for the next accounting period It will begin cycle.
The accounting cycle, the eight basic steps that can be seen in the following figure and has. These procedures are described in the following list.

Transaction
Financial transactions, to start the process. The transaction, sales and product take-back to, including the payment of deposits or money of the purchase of goods, or company financial activity other involving the exchange of assets, establishment or payoff of debt or from, for business activities It can be, the owner of the company.


Journal
The transaction, to maintain the chronological order of the transaction of magazines, are listed in the appropriate journals. Journal, known as "book of original entry" is the first place where the transaction is being displayed. 

posting

The transaction will be posted an effect on it accounts. Using these accounts, it is part of the general ledger, which you can find an overview of the accounting of all of the business.


Trial Balance
(It may be a month depending on the practices of businesses, quarter, or year) at the end of the accounting period, calculate the trial balance.


Worksheet
Unfortunately, many times of trial balance in your first calculation, it has shown that this is not in balance. In that case, you are looking for the error, the correction called tracking adjustment to the worksheet, you will make.
Adjustment also, taking into account the depreciation of assets, more accurately, to adjust the payment of one-time should be allocated on a monthly basis so as to coincide with the monthly income and monthly expenses (for example, insurance, etc.) It is made for. After you record the adjustment when you make, in order to confirm that the account is in balance, it takes the balance of another trial.


Adjustment of the journal
Your trial balance is, if you show the account after the necessary adjustments have been made to the account is in balance, please post the necessary corrections to the account that was affected. Trial balance process is complete, you do not need to adjust the entry of until all necessary corrections and adjustments are identified.


Financial statements
You are using a modified account balance, to prepare the balance sheet and income statement.


Close the book
You close the book for revenues and expenses, start again the whole cycle a zero balance in their account.
As a businessman, do you want to be able to measure quarter, month by year, quarter, your profit and loss of the month by the base of the year. For this purpose, income and expenses, you need to start with a zero balance at the beginning of each accounting period. In contrast to this, you will carry assets, liabilities, and on top of the capital account balances for each cycle.


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