Question

In: Accounting

1)What are the steps in completing the accounting cycle? 2)How do the different steps affect the...

1)What are the steps in completing the accounting cycle?

2)How do the different steps affect the financial statements?

3)What is the effect on the financial statements of missing a step when completing the accounting cycle?

4)How do these steps play a roll in accrual basis accounting?

Solutions

Expert Solution

1. The eight steps in the accounting cycle, in order, are: transactions, journal entries, posting, trial balance, worksheet, adjusting journal entries, financial statements and closing of the books. ... At the end of the accounting period, a trial balance is calculated as the fourth step in the accounting cycle.

2. Different steps effect the cycle are

Journal entries - recording the transaction

Posting - segregating the entries

Trial balance - totaling all the related accounts

Adjusting entries - to adjust any ommitted entries

Financial statements - to show the results of entire accounting work

3. Effecting the financial statements if any step missed in accounting cycle is confusion between the further step and previous step and there is no clarity for entire process

4.in accrual accounting basis all the steps play an important role to provide best results of accounting cycle. In accrual basis all the above mentioned steps are followed by each other and every step was done in timely manner if any misses it leads to great confusion.


Related Solutions

What are the steps in completing the accounting cycle? How do the different steps affect the...
What are the steps in completing the accounting cycle? How do the different steps affect the financial statements? What is the effect on the financial statements of missing a step when completing the accounting cycle? How do these steps play a roll in accrual basis accounting?
What is accounting cycle? Outline the basic steps included in accounting cycle.
What is accounting cycle? Outline the basic steps included in accounting cycle.
Steps in the Accounting Cycle Rearrange the following steps in the accounting cycle in proper sequence:...
Steps in the Accounting Cycle Rearrange the following steps in the accounting cycle in proper sequence: a. Transactions are analyzed and recorded in the journal. 1 b. An unadjusted trial balance is prepared. 2 c. Transactions are posted to the ledger. 3 d. Adjustment data are assembled and analyzed. 4 e. An adjusted trial balance is prepared. 5 f. Adjusting entries are journalized and posted to the ledger. 6 g. An optional end-of-period spreadsheet is prepared. 7 h. A post-closing...
Describe, in your own words, each of the steps of the accounting cycle. How do individual...
Describe, in your own words, each of the steps of the accounting cycle. How do individual transactions ultimately result in financial statements? What is the general ledger and what is it used for?
What is accounting cycle? What is its relationship with operating cycle? In the steps to compile...
What is accounting cycle? What is its relationship with operating cycle? In the steps to compile financial statements, explain a few accounts that are more likely to be used to link these financial statements.
What is accounting cycle? What is its relationship with operating cycle? In the steps to compile...
What is accounting cycle? What is its relationship with operating cycle? In the steps to compile financial statements, explain a few accounts that are more likely to be used to link these financial statements.
1. what specific steps of muscle contraction cycle cost energy? list relevant steps 2. how are...
1. what specific steps of muscle contraction cycle cost energy? list relevant steps 2. how are the processes leading to muscle cramps associated with intense activity in rigor mortis related?
Define in own words please CHAPTER 4 – Completing the Accounting Cycle Accounting cycle Closing entries...
Define in own words please CHAPTER 4 – Completing the Accounting Cycle Accounting cycle Closing entries Closing process Closing the books Current liabilities First closing entry Fiscal year Liquidity Long-term liabilities Current Ratio – write the equation for definition Notes receivable Reversing entries Solvency Temporary (nominal) accounts Working capital – write the equation for definition
"The steps in the accounting cycle for a merchandising company are the same as the steps...
"The steps in the accounting cycle for a merchandising company are the same as the steps in the accounting cycle for a service company." Do you agree or disagree? What are the special journals that merchandising companies use? Explain how merchandising companies use these journals.
"The steps in the accounting cycle for a merchandising company are the same as the steps...
"The steps in the accounting cycle for a merchandising company are the same as the steps in the accounting cycle for a service company." Do you agree or disagree? What are the special journals that merchandising companies use? Explain some advantages of using Special Journals..
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT