Accounting Cycle

School: University of South Carolina - Course: ACCT MISC - Subject: Accounting

ACCOUNTING CYCLE ̶̶Accounting is a serviceactivity. Its function is to provide information, primarily financialin nature, about economic events that is intended to be useful in making economic decisions. ̶̶Accountingis the language of business Users of Financial Information Investors (existing and potential) Leaders and other creditors Employees Customers Governments and their agencies Public STEPS OF ACCOUNTING CYCLE ̶̶The Accounting Cycle refers to a series of sequential steps or procedures toaccomplishthe accounting process. ̶̶Thiscycleis repeatedeach accounting period. ̶̶Toproducea financialdata, Accounting Cycle must be accomplished.

Optional steps: If a work sheet is prepared, Steps 4, 5, and 6 are done in the work sheet, and adjusting entries are journalized and posted after Step 7. If reversing entries are prepared, they occur between Steps 9 and 1. The steps in the cycle are done in sequence (Steps 1 to 9). Steps 1 to 3 may occur daily during the accounting period. Companies perform Steps 4 to 7 on a periodic basis, such as monthly, quarterly, or annually. Steps 8 and 9—closing entries and a post-closing trial balance—usually take place only at the end of a company's annual accounting period. MAY 2019 MONTUEWEDTHURFRISAT SUN 1234 567891011 12131415161718 19202122232425 26728293031 JUNE 2019 1 Steps 1 to 3 Steps 4 to 9 Step 10 STEP 1: ANALYZE BUSINESS TRANSACTIONS31