Acc 201 Accounting Cycle Report Part I_A.M_2.2.5.18.docx

Acc 201 Accounting Cycle Report Part I_A.M_2.2.5.18.docx -...

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ACC 201 Final Project Part I Accounting Cycle Report ACC 201 Final Project Part I Accounting Cycle Report A.M. Southern New Hampshire University
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ACC 201 Final Project Part I Accounting Cycle Report 2 The purpose of this paper is to describe the accounting cycle and the steps businesses need to follow to keep its accounting records in an orderly manner that allows them to report accurate financial information about their businesses and keep track of their profit or losses and perform prices adjustment as needed. The accounting cycle should consist of a sequence of ten key steps to complete a full cycle within a given period of time (Person, 2014, p. 199). Each step in the accounting cycle plays an important role in creating accurate business transactions and recordings for proper financial analysis throughout the accounting cycle and leading up to the preparation of financial statements. It is very critical to complete every step carefully and accurately to avoid errors and making sure nothing is left out or omissions of steps or transactions are done. The accounting cycle starts with the beginning account balances. A business event or transaction happens and the first four steps are where the transactions are analyzed and recorded in the general journal with a journal entry as they occur. Meaning, posts of debits and credits from the journal to each individual account where the unadjusted balance for each account is processed and an unadjusted trial balance can be prepared. After the balances and the unadjusted trial balance is analyzed, the business can make the end of period adjustments, these adjusted journal entries are posted to the trial balance turning it into an adjusted trial balance. All these are covered by the next three steps of the accounting cycle, where adjusting entries, journalize and post adjusted entries take place to prepare the adjusted trial balance.
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