Professional Documents
Culture Documents
Accounting Cycle
a sequence of accounting procedures which
are repeated continuously during each
accounting period.
Accounting period /fiscal period: any span of
time covering a complete accounting cycle
E.g. a month ,a quarter or half a year, a year
Fiscal year/accounting year: twelve
consecutive months
The
The Accounting
Accounting Cycle
Cycle
Journalize
transactions.
Post entries to
the ledger
accounts.
Prepare trial
balance.
Journalize and
post adjusting
entries.
Complete a
work sheet.
Prepare
financial
statements.
Steps in Journalizing
Assets
Assets
Step 1: Examine
source documents.
Liabilities
Liabilities
Equity
Equity
Step 2: Analyze
transactions.
Step 3: Record
transactions in a
journal.
The
The Journal(
Journal(
))
In
In an
an actual
actual accounting
accounting system,
system, transactions
transactions
are
are initially
initially recorded
recorded in
in the
the journal.(
journal.( handout)
handout)
Exercise
Problem 1 on page 53.
Posting
Posting Journal
Journal Entries
Entries to
to the
the
Ledger
Ledger Accounts
Accounts
Posting ( )
involves copying
information from
the journal to the
ledger accounts.
The
The Ledger(
Ledger(
))
Cash
Accounts
Payable
Jill Jones,
Capital
Accounts
Accounts are
are
individual
individual records
records
showing
showing increases
increases
and
and decreases.
decreases.
The
The entire
entire group
group of
of
accounts
accounts is
is kept
kept
together
together in
in an
an
accounting
accounting record
record
called
called aa general
general
ledger(
ledger(
))
Chart of Accounts
A official list of all the accounts and their
account numbers
1. The first digit indicates the major account
classification
2. The second digit indicates financial
statement classification
3. The third digit indicates detailed account
classification
Posting
Sorting out and copying the information from
the journal to the ledger account.
Posting
Posting Journal
Journal Entries
Entries to
to the
the
Ledger
Ledger Accounts
Accounts
Posting
Posting Journal
Journal Entries
Entries to
to the
the
Ledger
Ledger Accounts
Accounts
Cross reference
3) Insert the page number of the journal in
the posting reference column of the ledger
account
4) Insert the ledger account number in the
posting reference column of the journal
Example on page 45
Ledger
Ledger Accounts
Accounts After
After Posting
Posting
This
This ledger
ledger format
format is
is referred
referred to
to as
as aa
running
running balance
balance (as
(as opposed
opposed to
to simple
simple
TT accounts).
accounts).
Steps in Processing
Transactions
Assets
Assets
Step 1: Examine
source documents.
Liabilities
Liabilities
Equity
Equity
Step 2: Analyze
transactions.
ACCOUNT NAME:
Date
Step 5: Prepare a
trial balance.
ACCOUNT No.
Description
PR
Debit
Credit
Balance
Step 3: Record
transactions in a
journal.
Exercise
Problem 1 on page 53.
End
End of
of Chapter
Chapter 22