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  1. Identifying and carefully examining the various transactions in the business
  2. Step –wise documentation of the various business transactions
  3. Updating the dealings/ transaction into the Ledger Accounts
  4. Carefully planning and entering of unadjusted trial balance
  5. Updating the adjustments in entries
  6. Preparing the trial balance according to the adjusted entries
  7. Making the Financial Statements
  8. Updating the closing entries
  9. Updating and documenting the Post-Closing Trial balance
  10. Finally recording the Reverse Entries

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Definition of Accounting Though there have been many definitions of the word ‘Accounting’, but the most appropriate and explicit is “the entire procedure of recording, summarizing and classifying of transactions of any business is known as Accounting.” It is a sequential course of events which begins with the recording or documentation of any transaction of a business dealing which ultimately results into the development and compilation of the financial statements of the defined period which is in consideration. The main objective of this methodical procedure is to extract useful financial information or financial statements that can be transformed into useful documents to provide a detailed analysis of owner’s equity and cash flow statement, balance sheets and income statements etc. The primary objective of documenting the transactions in an accounting cycle is to keep a track of all the dealings as and when they take place, and result into creation of detailed financial statements on a regular basis. This procedure is replicated for each accounting period taken into consideration. The Accounting Cycle There are 10 steps in the methodical procedure of documenting the transactions in an Accounting Cycle. The steps are as below: Identifying and carefully examining the various transactions in the business Step –wise documentation of the various business transactions Updating the dealings/ transaction into the Ledger Accounts Carefully planning and entering of unadjusted trial balance Updating the adjustments in entries Preparing the trial balance according to the adjusted entries Making the Financial Statements Updating the closing entries Updating and documenting the Post-Closing Trial balance Finally recording the Reverse Entries STEP 1: Identifying and Carefully Examining the Various Transactions in the Business The initial step is to identify and analyze all the sources of documents, events and dealings/ transactions of the business, which include the…

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Accounting–C….docx