The accounting cycle refers to the process by which companies produce their financial statements for a specific period of time. It is called a cycle because the steps are repeated each reporting period. The organization at which I am employed completes its accounting cycle monthly. The organization is a privately owned nursing facility licensed and incorporated in the state of Virginia that has been in business since 1966. An explanation of the overall accounting cycle at the organization including a description of the people, processes, and systems that are integral to the cycle will follow.…
An accounting cycle is a sequence of six steps in the processing of financial transactions…
The nine steps of the accounting cycle ae generally described as follows. These steps are designed to follow a logical sequence to record transactions and prepare financial statements, and begins with transaction analysis and ends with closing of the books.…
3. Post the Ledger Accounts – The general entries are posted to the general ledger and organized by account.…
Prime entry books: is prime entry books which are also known as books of original entry are books where transactions are first recorded. The main books of prime entry consists of sales day book, purchase day book, sales return day book, purchase return day book, general journal and cash book.…
The transactions completed by Franklin Company during January, its first month of operations, are listed below. Assume that Franklin Company uses the following journals: Cash Receipts (CR), Cash Payments (CP), Revenue (R), Purchases (P), and General (G). Assume that it uses Accounts Receivable and Accounts Payable Subsidiary Ledgers as well as a General Ledger. Indicate by letters which journal would be used for each transaction. Also indicate if the entry requires a posting to a subsidiary ledger.…
Accounting 211 Study Guide for Final Exam Chapters 7 – 12 Chapter 7: 1. Terminology Accounting information system People, records, and methods that collect and process data from transactions and events, organize them in useful forms, and communicate results to decision makers Accounts payable ledger Subsidiary ledger listing individual creditor (supplier) accounts Accounts receivable ledger Subsidiary ledger listing individual customer accounts. Batch processing Accumulating source documents for a period of time and then processing them all at once such as once a day, week, or month. Cash disbursements journal Special journal normally used to record all payments of cash; also called cash payments journal Cash receipts journal Special journal normally used to record all receipts of cash.…
A typical accounting cycle is made up of eight steps which include the following; (1) identifying and measuring transactions; (2) journalizing; (3) posting; (4) preparing an unadjusted trail balance; (5) making adjusting entries; (6) preparing an adjusted trial balance; (7) preparing financial statements; (8) closing.…
The accounting cycle consists of: identifying, journalizing, posting, trail balance, adjusted entries, adjusted trial balance, preparing financial statements, closing, post-closing trial balance, reversing entries, and financial statements (Kieso, Weygandt, & Warfield, 2007). Identifying a transaction or event is the first step in the cycle; businesses engage in various activities on a daily, as a result, determining when to record and activity is crucial. Once the activity is identified a transaction must be recorded, the next step is to journalize the transaction. The journalizing process can be completed in a variety of ways; the most common method is the general journal, although some companies keep other special journals. The next step in the accounting cycle is posting, which is the procedure of transferring journal entries to the ledger accounts (Kieso et al., 2007), so that the transactions reflect in the appropriate ledger accounts balances. After the…
The accounting cycle is a process that normally uses accounting procedures to record transactions and prepare financial statements of a company. The accounting cycle is made up of nine steps: Journalizing, posting, trial balance, adjusting entries, adjusted trial balance, preparing financial statements, closing, post-closing trial balance, and reversing entries. This presentation will include a description of the people, processes, and systems that are integral to the cycle for Starbucks Coffee Company.…
An organization’s accounting information system includes collecting information then dividing the information into cycles. This paper will identify the five accounting cycles and specifically how Riordan Manufacturing uses the expenditure cycle. The strengths and weaknesses of the internal controls related to the expenditure cycle will be examined. This paper will explain how to integrate the expenditure cycle into an enterprise-wide accounting information system. The various types of information systems necessary to achieve this integration…
Prepare the journal entries necessary to record the transactions above using appropriate dates. (Record two entries for (1) and (2), one for the purchase, and one for the payment.)…
Special journals are used to record and post transactions, and are uniquely designed for each business, but for most merchandising companies, the journals used are sales journals, for recording sales on credit; cash receipts journals, to record sales made by cash; purchases journals, for recording goods obtained on credit; and cash disbursements journals, for recording payments made by cash. You are also able to use this format for your…
Four different special journals are sales journal, purchase journal; cash receipt journal and cash payment journal. They all are special journal being used to record data of recurring nature. A transaction in accounting is recorded with the help of journal entry. To avoid passing entries all time of transactions of same nature, they are recorded in special journal. In this way some repletion of work is avoided, and it helps doing ledger posting specially when using manual accounting system. One can also see all transaction of same nature at one place in its respective special journal. Sales journal records all transactions related to sales, credit purchase is recorded in purchase journal, and all cash receipts and payments are recorded in cash receipts and payments journal.…
Having passed the double or journal entries, the next step is to post these double or journal entries into Ledger accounts. Ledger account or an account is simply the classification of double entries which we have made in General Journal or any other journal. In an account we bring together all similar entries in one place. For example a company has purchased goods on 4th and 7th January, we would put both entries in purchases account because of their similar nature i.e. the purchases and therefore an account shows net increase or decrease in the balance of similar entries / items (in the aforementioned example there was an increase in purchases balance)…