...Accounting Cycle ACC/421 July 26, 2011 Jana Howie Accounting Cycle Accounting cycle is “the name given to the collective process of recording and processing the accounting events of a company. The series of steps begin when a transaction occurs and end with its inclusion in the financial statements” (Investopedia, 2011). The basic eight steps of the accounting cycle will be explained and described in this paper. Identifying and Recording These first steps are associated with one another and are done during the month while transactions happen. Business transactions are sorted into debits and credits that will be entered into accounting records. These transactions are identified through an original source document i.e. invoice, time card, purchase order). Journalizing “A company records in accounts those transactions and events that affect its assets, liabilities, and equities” (Kieso, Weygandt, & Warfield, 2007, p. 69). Journals include sales, purchases, cash receipts, general and cash payment journals; these in which are kept in chronological order. Posting This occurs when transferring the journal entries to the ledger accounts. Ledgers are kept by account; these include T-account forms or balances. A “general ledger is usually monthly while subsidiary ledgers are usually done daily” (Kieso, Weygandt, & Warfield, 2007, p. 68). Trial Balance A calculation that verifies the total of debits is equal to the total of credits. An unbalanced trial balance...
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...Accounting Cycle Yesenia Arroyo AC114 June 24, 2014 Dr. Tonjua McCullough Accounting Cycle I. Introduction II. Accounting in Action a. Identify b. Record c. Communicate III. Accounting Cycle d. Analyze Transactions e. Journalize the Transactions f. Post to Ledger Accounts g. Prepare a Unadjusted Trial Balance h. Journalize and Post Adjusting Entries i. Prepare an Adjusted Trial Balance j. Prepare Financial Statement k. Journalize and Post Closing Entries l. Post-Closing Trial Balance m. Optional Reversing Entries IV. Conclusion While not having an accounting cycle for the business can possibility hurt the company, following the accounting process and steps will help with the accounting procedure. Many organizations will have accounting established to process all the business revenues and expenses. To have a successful business people follow the accounting actions of identify, record and communicate the daily transactions of the company. After the actions are completed then the company will go through the process of the accounting cycle. There is a ten step accounting cycle that business owners can go threw to show the revenues and expenses. Collect data, analyze the transactions, record transaction to journal, post from journal to ledger, prepare unadjusted trial balance, record adjusting entries to ledger, prepare adjusted trial balance, prepare financial statement...
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...The Accounting Cycle The Accounting cycle of a business require a set of steps to that keep a record of events and transactions that happens during an appointed time span. The time span typically last a month. The accounting clerk usually performs a multitude of task within an accounting cycle. Such as, general clerical duties, accounting and bookkeeping functions, and process account payables and receivables as needed. (Winthrop). The accounting departments create a chart with accounts and determine how to record the financial information. Businesses form a method to secure the certainty of recording financial information that generates a change in their financial standing. Every month, companies execute tasks to allow the recording of their financial events and also their transactions. These tasks incorporate procedures to arrange financial statements to contribute useful information for the private and foreign users. If for some reason an issue is not calculable then it is not reported. Tax experts and governing agencies provide codes and policies to assure the confidence of a full exposure and compatibility of all financial information. The FASB issued the following guideline for recognizing revenue: "Revenue is recognized when it is realized or realizable and it is earned" (Siegel, Levine, Qureshi, & Shim, 2001). Analysis and Journalizing Many businesses use a double-entry system that is a method that records every action with a debit and a credit. In...
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...Overall Accounting Cycle Hannah Tran ACC/421 November 11, 2013 Overall Accounting Cycle Maintaining a set of accounting records is not optional, especially for large companies or whomever needs to go through financial audits. These accounting records are done through-out what it is called an accounting cycle. An accounting cycle is a set of procedures to record transactions and prepare financial statements (Kieso, Weygandt, & Warfield, 2012). This is also to ensure the accuracy and conformity of financial statements to GAAP. This set of procedures includes: (1) identifying and measuring transactions; (2) journalizing; (3) posting; (4) preparing an unadjusted trial balance; (5) making adjusting entries; (6) preparing an adjusted trial balance; (7) preparing financial statements; and (8) closing (Kieso, Weygandt, & Warfield, 2012) . This paper will summarize the overall accounting cycle for the inventory department at Sunrise Growers. Nowadays with the help of computerized accounting system, mathematical errors have been reduced tremendously when recording accounting transactions. In addition, computerized accounting system has minimized the workload and increased productivity. Although Sunrise Growers uses a computerized accounting system to record transactions, this paper will assume the accounting cycle done is manually. Identifying and Measuring transactions This step is to analyze the transactions and determine what to record. On October 10, Sunrise...
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...Accounting Cycle Description Paper Riordan Manufacture Inc. Accounting Process Team C Acc. /340 Cito Vanegas July 29, 2014 Introduction Riordan Manufacturing Inc. is a leader in their industry which is plastic injection molding. This company could not manually accounting due to the company's wide span corporation. Manually is very time consuming and it is tedious for the high production that Riordan does and services. Riordan Manufacture need to use computer software program to do all Riordan Manufacture accounting needs. This paper will explain how Riordan Manufacture accounting cycle can assist with the strengths and weakness of the internal controls of the cycles. Riordan Manufacture needs to make sure that their company moves forward and smoothly. The Five-accounting cycles The five-accounting cycles are revenue, expenditures, conversion financing, and fixed asset. Revenue is the first-accounting cycle which is the revenue, which includes sales and cash receipts. All sales that Riordan makes form the plastic products that are manufactured needs to be recorded in the accounting information systems. Expenditure is the second of the accounting cycle which includes the expenses of making the product such as material supplies, payroll, and cash disbursements. Conversion is the third-accounting cycle which includes, but not limited to all the plastic production costs to all goods and services that Riordan Manufacture supply. The conversion cycle takes information from...
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...Accounting Cycle Accounting Cycle For all types of businesses, transactions take place. Transactions vary from such things as sales, expenses, wages, purchases, and receivables. These transactions are maintained in various journals and ledgers and tell the financial story of the business. The process of maintaining this financial story is called the Accounting Cycle. Evaluation There are ten steps involved in completing the accounting cycle. They are as follows: “(1) Transactions are analyzed and recorded in the journal. (2) Transactions are posted to the ledger. (3) An unadjusted trial balance is prepared. (4) Adjustment data are assembled and analyzed. (5) An optional end-of-period spreadsheet is prepared. (6) Adjusting entries are journalized and posted to the ledger. (7) An adjusted trial balance is prepared. (8) Financial statements are prepared. (9) Closing entries and journalized and posted to the leger. (10) A post-closing trial balance is prepared.” (Warren, Reeve, & Duchac (2012) pg. 162) The accounting cycle begins with analyzing and recording transactions. The bookkeeper, for example, would review the invoices, purchase orders, bank statements, etc. After the transactions have been analyzed they are now ready to be posted to the journal using the double-entry accounting system. The double-entry accounting system means that the transactions are recorded in at least two or more accounts so that the debits and credits equal. ...
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...WAlmart | Accounting Cycle Paper | Accounting Cycle of Walmart | | Melanie Bartholomew | September 2, 2012 | When a company, like Walmart, begins to prepare financial statements and reports at the end of an accounting cycle they generally use Generally Accepted Accounting Principles and “the collective process of recording and processing the accounting events” (Definition of ‘Accounting Cycle’, 2012), known as the accounting cycle. There are nine steps involved in the accounting cycle. Walmart would begin the process by collecting and analyzing data from their events and transactions. Next, the company puts those transactions into a general journal. After journalizing their transactions the company posts these entries to the general ledger. The next step in the accounting cycle is to prepare an unadjusted trial balance. Once the unadjusted trial balance is completed the company makes the appropriate adjustments and then prepares an adjusted trial balance. Adjustment entries are made to ensure the company follows revenue recognition and the matching principle and report appropriate assets, liabilities, and owner’s equity at the statement date; and ensure proper reporting of revenues and expenses for the accounting period. This is an important step in the accounting process because the data in the unadjusted trial balance may not be up-to-date and complete. This happens because not all events require daily journalizing and because the company may have some costs that...
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...11/17/2013 The Accounting Cycle AC114 Accounting has three basic activities; it identifies, records, and communicates the numbers to the interested parties of the company. The internal users who rely on accounting information are the people who plan, organize, and run the business. The most common external users that rely on the accounting information are investors and creditors, because neither of the two would invest into a business with inaccurate accounting information. To ensure accuracy we have to follow the accounting cycle which has nine steps. The first step is to analyze the business transactions because it identifies the economic events relevant to its business. When we analyze we figure out whether a transaction is an asset, liability, or owner’s equity. Next we would journalize the transaction data into a journal. This process contributes to the recording process of the accounting cycle because it discloses the effects of a transaction, provides a chronological order, and helps prevent or locate errors of a transaction. When we journalize we would separate each transaction by date, amount, and description. Journalizing means we would post the information to a general ledger. The ledger is helpful because it takes all the information about changes in specific account balances and keeps it in one place. The ledger would provide the balance of each account and arranged in sequence as it would show on the financial statement. The accounts are numbered for easier...
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...Accounting Cycle Description Paper Team A ACC/340 Accounting Cycle Description Paper The payroll processing cycle is very time consuming and tedious when done manually. Therefore, the ‘Mom and Pop’s Grocery Store’ has elected to integrate its payroll with a computer software program. With this implementation the payroll process will be more efficient and effective. This paper will explain how the payroll processing cycle for ‘Mom and Pop’s Grocery Store’ integrates onto an enterprise-wide accounting information system. An enterprise-wide accounting information system “focuses on the business process of the organization as a whole” (Bagranoff, Simkin, & Stand, 2008, p. 7). Business process reengineering (BPR) is a total re-design of processes used by an organization that are no longer effective or efficient (Braganoff et al, 2008, p. 163). The ‘Mom and Pop’s Grocery Store’ will use BPR to update the old payroll process to the new enterprise-wide AIS system. The Accounting Information System (ASI) is a system that is put in place for a company to maintain its accounting system. The input devices commonly associated with AIS systems include: “standard personal computers or workstations running applications; scanning devices for standardized data entry; electronic communication devices for electronic data interchange (EDI) and e-commerce” (Business Glossary, p. 1, 2005, 2000, 1995, 1987). In addition, many financial systems come with Internet settings...
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...Accounting Cycle Justin McKibben ACC/421 July 1, 2013 Ric Hedges Accounting Cycle Houston Federal Credit Union is a financial institution in Sugar Land, TX and is responsible for providing financial services for its members. The accounting cycle at the organization is a typical cycle of any standard financial institution. The procedures of the accounting cycle must be in the guidelines set forth by GAAP. The employees of the organizations accounting department confirm with the rules and standards within GAAP, and each employee is responsible for certain areas of accounting. The organization currently uses accounting software called Symitar Episys, which is controlled by Jack Henry & Associates. They are responsible for serving more than 500 credit unions in servicing every area of the organization as well as accounting programs specified for completing the daily and monthly accounting processes. The accounting cycle for each period begins with the collection and analysis of transactions from the organizations day-to-day activities. Transactions are collected and recorded and are prepared to be posted to the appropriate general journal ledger accounts for proper documentation. Once the transactions are prepared, the appropriate journal entries are made to the correct ledger accounts. Each entry must consist of two or more entries, which the debits and credits must match other the entry is not balanced and cannot be posted. These entries can describe the...
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...Financial Accounting Case on accounting cycle Bharat Gupta promotes Bharat Traders, his proprietary firm, to start the business of trading in product X on 1st April, 2009. He hires an office at A-12, Agarwal Complex , Vikas Marg, Delhi-110092 @ Rs. 2,500 p.m.. The following are the details of the transactions entered into by the firm during month of April . Record the transactions in the Journal and classify them into Ledger and summarize the balance into Trial Balance. 2009 Amt. Rs. April 1 Received cash from Bharat Gupta towards his capital 1,50,000 1 Opened a current account with the State Bank of India 1,35,000 1 Issued cheque for office rent for April 2,500 1 Purchased one scooter from Regent Automobiles on credit. All initial cost including Insurance borne by the vendor 31,500 1 Paid cheque towards down payment for Scooter, balance loan, against security of scooter, payable in 12 monthly installments starting May 1 with interest @ 12% on reducing balance 7,500 2 Purchased office furniture for cash 8,500 2 Purchased office equipments. Paid cheque 11,500 5 Purchased 45 units of products X. Issued cheque 45,000 8 Sold 10 Units of Product X. Received cheque deposited in SBI 12,500 10 Cheque issued for advertisement in the local daily Delhi Times 2,200 12 Purchased 75 units of X from ABC & Co. on 15 days credit 75,750 16 Sold 25 units of X to RIL & Co on Credit of one week 31,875 19 Sold 5 units of X for Cash 6,425 ...
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...CHAPTER 4 THE ACCOUNTING CYCLE: ACCRUALS AND DEFERRALS OVERVIEW OF BRIEF EXERCISES, EXERCISES, PROBLEMS, AND CRITICAL THINKING CASES Brief Exercises B. Ex. 4.1 B. Ex. 4.2 B. Ex. 4.3 B. Ex. 4.4 B. Ex. 4.5 B. Ex. 4.6 B. Ex. 4.7 B. Ex. 4.8 B. Ex. 4.9 B. Ex. 4.10 Learning Objectives 3, 4 3, 4 3 3 6 4 5 5 5 8 Topic Deferred expenses and revenue Deferred expenses and revenue Accounting for supplies Accounting for depreciation Accrued revenue Unearned revenue Accrued salaries Accrued interest Accrued taxes Concept of materiality Skills Analysis Analysis Analysis Analysis Analysis Analysis Analysis Analysis Analysis Judgment, communication, analysis Exercises 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 Topic Accounting terminology Effects of adjusting entries Deferred expenses and revenue Deferred expenses and revenue Accrued revenue Real World: American Airlines Deferred revenue Accruals and deferrals Notes payable and interest Interpreting business transactions Adjustments and the balance sheet Real World: Various firms Deferred revenue Analyzing the adjusted trial balance Effects of adjusting entries Accounting principles Real World: Home Depot an annual report Using Learning Objectives 1–9 1–6, 9 1-7 1-7 1-7 1, 2, 4 1-6, 9 1, 2, 5 1–7, 9 1, 3–5, 7 1, 4, 7 1–7, 9 1–6 1–8 1, 2 Skills Analysis Analysis Analysis Analysis Analysis Analysis Analysis Analysis Analysis, judgment Communication, analysis Analysis, judgment Analysis Analysis Communication...
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...Facts for simulation 2 | * | * | * | * | * | * | * | * | * | * | * | * | * | * | * | * | * | * Today's date: March 31, 2013. | * | * | * | * | * | * | * | * | * | * | * | * | * | * | * | * | * | * Peter Griffin called me asking about his tax situation for 2012 & 2013. * He provided the following facts: | * | * | * | * | * | * | * | * | * | * | * (1) Peter (born 7/1/45) has been a single parent since 2009 when his wife Mary passed away. | * | * | * | * | * | * | * | * | * | * | * | (2) His son Paul (born 4/4/90) finished college August 2012. In spite of the degree, Paul was unable to get a better job so he kept working at Starbucks where he made about $300/wk. As a result, he's still living at home and will continue to do so in 2013. | * | * | * | * | * | * | * | * | * | * | * (3) Peter changed jobs on July 1, 2012. * He left BIG4 firm...
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...Xcom 285 Final Business Writing Portfolio Business Writing Portfolio Pamela Williams-Rue XCOM/285 Essentials of Managerial Communication Axia College Xcom285 has taught me many valuable assets that I can use in my future, but I believe that the most valuable thing that I have learned is that communications is not just talking. Communications is about listening and writing as well. It is important in business communications to understand that to effectively communicate one need’s to tune into everything that is going on around him or her. This means that he or she needs to understand the audience, the purpose of, and the most effective way to deliver or receive the message. When discussing resources businesses use to effectively communicate, I learned other methods of communications, what role those methods play in our daily activities, and ideas on how to use them. It was great to take those trends and focus on using them effectively to reach a specific audience, and what characteristics of the audience need to be considered when trying to ensure that the audience is being reached effectively. One of the more interesting assignments was the cross culture communications matrix. The reason I found this interesting was because it gave me a better understanding of the diversifications of the world. It was also fun to read about what was considered socially acceptable, un-acceptable, and the norm for different parts of the world. Week eight’s discussion about the laws and policies...
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...Before any financial statements are prepared, journal entries, called adjusting entries, are made to ensure that the company's financial records adhere to the revenue recognition and matching principles. Adjusting entries are necessary because a single transaction may affect revenues or expenses in more than one accounting period and also because all transactions have not necessarily been documented during the period. Each adjusting entry usually affects one income statement account such as a revenue or expense account and one balance sheet account. For example if a company has a $1,000 debit balance in its supplies account at the end of a month, but a count of supplies on hand finds only $300 of them remaining. Since supplies worth $700 have been used up, the supplies account requires a $700 adjustment so assets are not overstated, and the supplies expense account requires a $700 adjustment so expenses are not understated. The four types of adjusting entries are accrued revenues, unearned revenues, accrued expenses, and finally prepaid expenses. The first is accrued revenues it is also called accrued assets are revenues already earned but not yet paid by the customer or posted to the general ledger. An example of accrued revenue would be if a custom ordered machine that has been shipped Freight On Board shipping point on the day the accounts receivable module is closed and the approval to bill the customer has not been received by the billing clerk. An adjusting entry would...
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