Principles of Financial Accounting.docx - Principles of Financial Accounting THE ACCOUNTING CYCLE The financial statements are the summary of all the

Principles of Financial Accounting.docx - Principles of...

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Principle s of Financial Accounting THE ACCOUNTING CYCLE The financial statements are the summary of all the individual transactions recorded during a period of time. They are the final products of the account cycle. All transaction in financial statements are adhering to balancing concept. There is no way to affect one side without a balancing entry. Nowadays accounting software has made many of the steps of accounting cycle automatically or redundant. But why we still studying these steps if we are NOT recording them manually? In fact, its way to establish a solid understanding of how accounting information in the form of source documents (like invoices and chqs) ultimately impact the financial statement of the company. It also helps us to be aware how our actions impact what ultimately gets presented in the form of financial statement. The objective of the accounting cycle is to produce financial statements for external uses. There are seven steps in the accounting cycle as below: 1-
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