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Accounting Cycle

The document outlines the 9 steps in the accounting cycle process: 1) Analyzing documents, 2) Journalizing, 3) Posting, 4) Unadjusted trial balance, 5) Worksheet, 6) Adjusting journal entries, 7) Financial statements, 8) Closing the books, and 9) Post-closing trial balance. It describes each step and explains that the accounting cycle provides a systematic process for recording, summarizing, and reporting financial information to help ensure accuracy and allow for performance analysis.

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tamoor
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397 views21 pages

Accounting Cycle

The document outlines the 9 steps in the accounting cycle process: 1) Analyzing documents, 2) Journalizing, 3) Posting, 4) Unadjusted trial balance, 5) Worksheet, 6) Adjusting journal entries, 7) Financial statements, 8) Closing the books, and 9) Post-closing trial balance. It describes each step and explains that the accounting cycle provides a systematic process for recording, summarizing, and reporting financial information to help ensure accuracy and allow for performance analysis.

Uploaded by

tamoor
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
  • Accounting Process Introduction: Provides an overview of accounting as a systematic process of recording, summarizing, and interpreting business transactions.
  • Accounting Cycle: Describes the sequence of steps in the accounting cycle, focusing on systematic transaction processing.
  • The Bottom Line: Summarizes the efficiency and accuracy benefits of using a standard accounting cycle.
  • Importance of the Accounting Cycle: Highlights the role of accounting methods in decision-making and financial monitoring.

Accounting process

Presented by :
Name roll no
Tamoor Safdar 027
Bilawal Hussain 011
Shoaib Khan 017
Accounting
 Accounting is an art of recording, summarizing
and interpreting the business transaction in a
systematic manner
Accounting process
 Accounting cycle refers to the specific tasks
involved in completing an accounting process.
 The length of an accounting cycle can be monthly,
quarterly, half-yearly, or annually.
 It may vary from organization to organization but
the process remains the same
Accounting cycle
Step 1: Analyzing Accounting
Documents
 Itis a very important step in which you examine
the source documents and analyze them
 For example cash, bank, sales, and purchase
related documents
 This is a continuous process throughout the
accounting period.
Step 2: Journalize
 Insecond step you pass journal entries using
double entry system in which debit and credit
balance remains equal.
 Journalizing leaves a record of all transactions in
one document.
 Helping to prevent mistakes and linking the debits
and credits for each transaction
General journal
Step 3: Posting
 The third step in accounting cycle is posting
 Also known as ledger account
 After recording in the journal, transaction are
transferred and posted to ledger
 All transaction for the same account are collected
and summarized
Cont..
 This is also a continuous process for the whole
accounting period.
 Examples of ledger accounts are:
 Cash
 Accounts receivable
 Inventory
 Fixed assets
Ledger account
Step 4: Unadjusted Trial Balance
 At the end of the accounting period, a trial
balance is calculated as the fourth step in the
accounting cycle.
 A trial balance tells the company its unadjusted
balances in each account.
 The unadjusted trial balance is then carried
forward to the fifth step for testing and analysis.
Unadjusted trial balance
Step 5: Worksheet
 Analyzing a worksheet and identifying adjusting
entries make up the fifth step in the cycle.
 A worksheet is created and used to ensure that
debits and credits are equal.
 If there are discrepancies then adjustments will
need to be made
Cont..
 Inaddition to identifying any errors, adjusting
entries may be needed for revenue and expense
matching when using accrual accounting
Step 6: Adjusting Journal Entries
 Inthe sixth step, a bookkeeper makes adjustments.
Adjustments are recorded as journal entries where
necessary.
Adjusted trial balance
Step 7: Financial Statements
 After the company makes all adjusting entries, it
then generates its financial statements in the
seventh step.
 For most companies, these statements will include
an income statement, balance sheet, and cash flow
statement
Step 8: Closing the Books
 Finally,a company ends the accounting cycle in
the eighth step by closing its books at the end of
the day on the specified closing date.
 The closing statements provide a report for
analysis of performance over the period.
Step 9: post-closing trial balance
 Finally, the post closing trial balance lists the
balances of the accounts that were not closed such
as assets, liability, and owner equity
 This trial balance helps verify that permanent
accounts balance, with equal debit and credit
sums, and that all temporary accounts were closed
properly
The Bottom Line
 The nine-step accounting cycle process makes
accounting easier for bookkeepers and busy
entrepreneurs.
 It can help to take the guesswork out of how to
handle accounting activities.
 It also helps to ensure consistency, accuracy, and
efficient financial performance analysis
Importance of the Accounting Cycle
 Organizations use accounting methods to track and
analyze financial transactions and monitor the
company’s money.
 Managers use the financial information accounting
provides to make decisions for the company.

Accounting process Presented by : Name roll no Tamoor Safdar 027 Bilawal Hussain 011 Shoaib
Accounting Accounting is an art of recording, summarizing and interpreting the business transaction in a systematic manner
Accounting process Accounting cycle refers to the specific tasks involved in completing an accounting process.  The length
Accounting cycle
Step 1: Analyzing Accounting Documents It is a very important step in which you examine the source documents and analyze t
Step 2: Journalize In second step you pass journal entries using double entry system in which debit and credit balance re
General journal
Step 3: Posting The third step in accounting cycle is posting Also known as ledger account After recording in the journal
Cont.. This is also a continuous process for the whole accounting period.  Examples of ledger accounts are: Cash Accoun
Ledger account

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