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مشاهدة النسخة كاملة : ?what is accounting cycle



محاسب متخصص
03-10-2014, 07:42 AM
?WHAT IS ACCOUNTING CYCLE



The accounting cycle comprises of the following steps which make up the cycle complete.

Recording:-

First step is to record the transactions in the form of entries passed in a book named journal.

Classifying:-

Specific ledger accounts are prepared by posting these entries from journal to ledger. This procedure is called classification and posting entries in various accounts.

Summarizing:-

Making of trial balance i.e., taking all the balances of ledger accounts in the trial. The balances of expenses, revenues, liabilities and assets would make the trial balance complete.

Reporting:-

Preparing profit and loss account/income statement where expenses are compared with revenue to arrive at the profit and loss and preparation of balance sheet where

Assets = liabilities + owners equity