Question

What is accounting cycle explain with examples

Answer 1

hey!!!

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The accounting cycle starts with a business event. Book keepers analyze the transactions and record it in the general journal with a journal entry. The debits and credits from the journal are then posted to the general ledger where an unadjusted trial balance can be prepared.

After accountants and management analyze the balances on the unadjusted trial balances , they can then make end of period adjustments like depreciation expense and expense accruals. These adjusted journal entries are posted to the trial balance turning it into an adjusted trial balance.

Now that all the end of the year adjustments are made and the adjusted trial balance matches the subsidiary accounts,financial statements can be prepared. After financial statements are published and released to the public,the company can close its books for the period. Closing entries are made and posted to the post closing trial balance.

At the start of the next accounting period occasionally reversing journal entries are made to cancel out the accrual entries made in the previous period. After the reversing entries are posted, the accounting cycle starts all over again with the occurrence of a new business transaction.

I have attached a picture in which there's a flowchart related to accounting cycle.

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