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Accounting Cycle Paper

1575 words - 7 pages

Running Header: Accounting Cycle Paper

Accounting Cycle Paper
Sharon Smith
Steven Uhl, ACC421

The Accounting Cycle is a series of steps which are repeated every reporting period. The process starts with making accounting entries for each transaction and goes through closing the books. Use this tutorial for an overview of the accounting cycle, covering activities required both during and at the end of the accounting period. The primary objectives of the accounting function in an organization are to process financial information and to prepare financial statements at the end of the accounting period. Companies must systematically process financial information and must have staff who ...view middle of the document...

At the my company wer don’t collect data until the end of the day.(answers corporation, 2008). This is were we count the tills and key in the amounts in the computer. Then we do the records of the over and shortages for that register. In the morning is were we actually finalize the reports for the previous day, so that we can look and see exactly what we are over and short for the week and to see how many sales we have actually done so far. (answers corporation 2008)
The next step is journalize the transactions. After collecting and analyzing the information obtained in the first step, the information is entered in the general journal, which is called the book of original entry. Journalizing transactions may be done continually, but this step can de done in a batch at the end of the day if data from similar transactions are being sorted and collected, on a cash register tape, for example. At the end of the day, the sales of $4,000 for cash would be recorded in the general journal in this form: Cash 4000, Sales 4000. (answers corporation, 2008). Since we just do the instore things we don’t really go into detail on general journals. This would be done in the corporation not the store it self.
The third step would be to post to the general ledger. Post to general ledger: The general journal entries are posted to the general ledger, which is organized by account. All transactions for the same account are collected and summarized; for example, the account entitled "Sales" will accumulate the total value of the sales for the period. If posting were done daily, the "Sales" account in the ledger would show the total sales for each day as well as the cumulative sales for the period to date. Posting to ledger accounts may be less frequent, perhaps at the end of each day, at the end of the week, or possibly even at the end of the month. (answers corporation, 2008).
The fourth step is prepare an unadjusted trial balance. Prepare an unadjusted trial balance: At the end of the period, double-entry accounting requires that debits and credits recorded in the general ledger be equal. Debit and credit merely signify position left and right, respectively. Some accounts normally have debit balances (e.g., assets and expenses) and other accounts have credit balances (e.g., liabilities, owners' equity and revenues). As transactions are recorded in the general journal and subsequently posted to the ledger, all amounts recorded on the debit side of accounts (i.e., recorded on the left side) must equal all amounts recorded on the credit side of accounts (i.e., recorded on the right side). Preparing an unadjusted trial balance tests the equality of debits and credits as recorded in the general ledger. If unequal amounts of debits and credits are found in this step, the reason for the inequality is investigated and corrected before proceeding to the next step. Additionally, this unadjusted trial balance provides the balances of all the accounts that may require...

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