Accounting Cycle

Accounting cycle:

Accounting is the system that identifies records and communicates the information that is relevant, reliable and comparable. And the accounting cycle is 8 series steps which are repeated in every single report period. Accounting cycle starts with analyzing and journalizing the transactions as they were founded. Next step is to adjusting journal entries to general ledger accounts. After that comes the step which is to post the transactions. Next step is to prepare a trial balance sheet. Next is to create a worksheet. Followed by journalizing and posting the adjusted entries. Next step is to prepare a financial statement. Then journalize and closing entries. Final step is to prepare after closing the books.Accounting cycle steps:It has 8 steps which am going to describe each of them separately. Analyzing and journalizing the transactions.

In this step business transaction of some sort happens such as sale or return, a purchase or purchase return of inventory or any other type of transaction. And the Business documents (purchase orders, receipts, invoices, etc.) are created.

Adjust the journal entries to the general ledger accounts. The next step is to list the data in appropriate journal; maintain order time to any transactions. This journal also known as "original book of entry", which is the first place to list transactions.

Post the transactions. In this step the transaction are posted in the account that impacts. Which they are a part of the general ledger account, where you can fine full summary of all the business accounts. Prepare trial balance sheet.

Trial balance sheet is a list of account titles on specific date, which shows all debits and credit in double entry account, with any disagreement including the errors.

Worksheet. The worksheet is an optional step in the accounting cycle; it gives the organization information about results for period of time. Moreover it has 5 sets of DR and CR columns. Many accountants use it to prepare unadjusted trial balance sheet, and then to prepare financial statement. journalizing and posting the adjusted.

DATE PARTICULARS DR RMCR RM

10-Jan

1Cash A/C105,000

To Capital A/C105,000

(Started business)

2Bank A/C90,000

To Cash A/C90,000

(cash deposited into

bank)

3Purchase A/C5,500

To Cash A/C5,500

(Good purchased

for cash

4Purchase A/C2,400

To Eddy A/C800

To Frankey A/C930

To Smith A/C160

To Liew A/C510

(Purchase good on

credit )

5Stationery A/C89

To Bottons A/C89

(Stationery on

credit )

6Tomy A/C170

Eric A/C240

Malcom A/C326

Tim A/C204

To Sales A/C940

(Sold good on

Credit )

8Rent A/C220

To bank A/C220

(Rent paid by

cheque )

10Fixtures A/C610

To Chiefs Bhd A/C610

(Fixture on credit )

11Salaries 790

To cash A/C790

(Salaried paid )

14Franky A/C30

Smith A/C42

(Good return)72

15Van A/C6500

To Bank A/C6500

(Van purchase )

16Bank account A/C2000

To Loan A/C2000

(Received Loan from

Barclay)

18Tomy A/C5

Malcom A/C20

(Good return )25

21Cash A/C145

To Sales A/C145

(Cash sales )

24Eric A/C130

Tim A/C410

Paul A/C158

To Sales A/C698

(Good sold on credit

26Frankey A/C900

Smith A/C118

To Bank A/C1018

(Emma paid the

amount by cheque )

29Bank A/C528

To Paul A/C158

TO Eric A/C370

(Received cheque )

30Cash A/C500

To loan A/C500

(Received loan)

30Cash A/C614

Cash Account

2010 JanRM2010 JanRM

1-JanCapital105,0002Bank90,000

21Sales1453Purchases5,500

30Barclay50011Salaries790

Tim614Balance c/d9,969

106,259106,259

Balance b/d9,969

Capital Account

2010 JanRM2010JanRM

Balance c/d105,0001Cash105,000

105,000105,000

Balance b/d105,000

Bank Account


2Cash90,0008Rent220

16Barclay2,00015Van6,500

29Paul15826Franky900

Eric370Smith118

Balance c/d84,790

92,52892528

Balance b/d84,790

Purchases Account

2010 JanRM2010 Jan RM

3Cash5,500Balance c/d7,900

4Eddy800

Franky 930

Smith160

Leiw510

7,9007,900

Balance b/d7,900

Eddy Account


Balance c/d8004Purchases800

800800

Balance b/d800

Franky Account


14Purchahse return304Purchases930

26Bank900

930930

Smith Account


14Purchases return424Purchases160

26Bank118

160160

Liew Account


Balance c/d5104Purchases510

510510

Balance b/d510

Stationery Account


5Buttons Ldt89Balancec/d89

8989

Balance b/d89

Buttons Ltd Account


Balance c/d895Stationery89

8989

Balance b/d89

Sales Account


Balance c/d17836Tomy170

Eric240

Malcom326

Tim204

21Cash145

24Eric130

Tim410

Paul158

17831783

Balance b/d1783

Tomy Account


6Sales170Balance c/d175

18Purchases return5

175175

Balance b/d175

Eric Account


6Sales24029Bank370

24Sales130

370370

Malcom Account


6Sales326Balance c/d346

18Purchases return20

346346

Balance b/d346

Tim Account


6Sales20430Cash614

24Sales410

614614

Rent Account


8Bank220Balance c/d220

220220

Balance b/d220

Fixtures Account


10Chiefs Bhd610Balance c/d610

610610

Balance b/d610

Chiefs Account


Balance c/d61010Fixtures610

610610

Balance b/d610

Salaries Accaunt


11Cash790Balance c/d790

790790

Balance b/d790

Purchases return Account


Balance c/d9714Franky30

Smith42

18Tomy5

Malcom20

9797

Balance b/d97

Van Account

Date2010 JanRMDate2010 JanRM

15Bank6,500Balance c/d6,500

6,5006,500

Balance b/d

Barclay Account


Balance c/d2,50016Bank2,000

30Cash500

2,5002,500

Balance b/d2,500

Paul Account


24Sales15829Bank158

158158

Trail balance of Small Finishing Retailer as on JAN 2010

ParticularsDr accountCr account

Cash account9,969

Bank account84,790

Purchases account7,900

Stationery89

Tomy175

Malcom346

Rent

220

Fixtures and Fittings610

Salaries790

Van6,500

Capital105,000

Eddy800

Liew510

Buttons Ltd89

Chiefs Bhd610

Barclay2,500

Sales1,783

Purchases return97

111,389111,389

Accounting Cycle

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