Фінансова енциклопедія


1 A B C D E F G H I J L M N O P Q R S T U V W X Y Z А Б В Г Д Е Ж З И І К Н О П Р С Т У Ф Ц Ч Э



ACCOUNTING CYCLE (eng)



The primary objectives of the accounting function in an organization are to process financial information and to prepare financial statements at the end of the accounting period. Companies must systematically process financial information and must have staff who prepare financial statements on a monthly, quarterly, and/or annual basis. To meet these primary objectives, a series of steps is required. Collectively these steps are known as the accounting cycle. The steps, applicable to a manual accounting system, are described below. Later, there will be a brief discussion of a computerized processing system.

THE STEPS OF THE CYCLE
1. Collect and analyze data from transactions and events: As transactions and events related to financial resources occur, they are analyzed with respect to their effect on the financial position of the company. As an example, consider the sales for a day in a retail establishment that are collected on a cash register tape. These sales become inputs into the accounting system. Every organization establishes a chart of accounts that identifies the categories for recording transactions and events. The chart of accounts for the retail establishment mentioned earlier in this paragraph will include Cash and Sales.
2. Journalize transactions: After collecting and analyzing the information obtained in the first step, the information is entered in the general journal, which is called the book of original entry. Journalizing transactions may be done continually, but this step can de done in a batch at the end of the day if data from similar transactions are being sorted and collected, on a cash register tape, for example. At the end of the day, the sales of $4,000 for cash would be recorded in the general journal in this form:
Cash 4000
Sales 4000

3. Post to general ledger: The general journal entries are posted to the general ledger, which is organized by account. All transactions for the same account are collected and summarized; for example, the account entitled ‘‘Sales’’ will accumulate the total value of the sales for the period. If posting were done daily, the ‘‘Sales’’ account in the ledger would show the total sales for each day as well as the cumulative sales for the period to date. Posting to ledger accounts may be less frequent, perhaps at the end of each day, at the end of the week, or possibly even at the end of the month.
4. Prepare an unadjusted trial balance: At the end of the period, double-entry accounting requires that debits and credits recorded in the general ledger be equal. Debit and credit merely signify position— left and right, respectively. Some accounts normally have debit balances (e.g., assets and expenses) and other accounts have credit balances (e.g., liabilities, owners’ equity and revenues). As transactions are recorded in the general journal and subsequently posted to the ledger, all amounts recorded on the debit side of accounts (i.e., recorded on the left side) must equal all amounts recorded on the credit side of accounts (i.e., recorded on the right side). Preparing an unadjusted trial balance tests the equality of debits and credits as recorded in the general ledger. If unequal amounts of debits and credits are found in this step, the reason for the inequality is investigated and corrected before proceeding to the next step. Additionally, this unadjusted trial balance provides the balances of all the accounts that may require adjustment in the next step.
5. Prepare adjustments: Period-end adjustments are required to bring accounts to their proper balances after considering transactions and/or events not yet recorded. Under accrual accounting, revenue is recorded when earned and expenses when incurred. Thus, an entry may be required at the end of the period to record revenue that has been earned but not yet recorded on the books. Similarly, an adjustment may be required to record an expense that may have been incurred but not yet recorded.
6. Prepare an adjusted trial balance: As with an unadjusted trial balance, this step tests the equality of debits and credits. However, assets, liabilities, owners’ equity, revenues, and expenses will now reflect the adjustments that have been made in the previous step. If there should be unequal amounts of debits and credits or if an account appears to be incorrect, the discrepancy or error is investigated and corrected.
7. Prepare financial statements: Financial statements are prepared using the corrected balances from the adjusted trial balance. These are one of the primary outputs of the financial accounting system.
8. Close the accounts: Revenues and expenses are accumulated and reported by period, either a monthly, quarterly, or yearly. To prevent their not being added to or comingled with revenues and expenses of another period, they need to be closed out—that is, given zero balances—at the end of each period. Their net balances, which represent the income or loss for the period, are transferred into owners’ equity. Once revenue and expense accounts are closed, the only accounts that have balances are the asset, liability, and owners’ equity accounts. Their balances are carried forward to the next period.
9. Prepare a post-closing trial balance: The purpose of this final step is two-fold: to determine that all revenue and expense accounts have been closed properly and to test the equality of debit and credit balances of all the balance sheet accounts, that is, assets, liabilities and owners’ equity.

COMPUTERIZED ACCOUNTING SYSTEM
A computerized accounting system saves a great deal of time and effort, considerably reduces (if not eliminates) mathematical errors, and allows for much more timely information than does a manual system. In a real-time environment, accounts are accessed and updated immediately to reflect activity, thus combining steps 2 and 3 as discussed in the preceding section. The need to test for equality of debits and credits through trial balances is usually not required in a computerized system accounting since most systems test for equality of debit and credit amounts as they are entered. If someone were to attempt to input data containing an inequality, the system would not accept the input. Since the computer is programmed to post amounts to the various accounts and calculate the new balances as new entries are made, the possibility of mathematical error is markedly reduced.
Computers may also be programmed to record some adjustments automatically at the end of the period. Most software programs are also able to prepare the financial statement once it has been determined the account balances are correct. The closing process at the end of the period can also be done automatically by the computer. Human judgment is still required to analyze the data for entry into the computer system correctly. Additionally, the accountant’s knowledge and judgment are frequently required to determine the adjustments that are needed at the end of the reporting period. The mechanics of the system, however, can easily be handled by the computer.

(SEE ALSO: Accounting; Accounting information systems) BIBLIOGRAPHY Dansby, Robert, Kaliski, Burton, and Lawrence, Michael (1999). College Accounting. St. Paul, MN: EMC Paradigm. Ingram, Robert W., and Baldwin, Bruce A. (1998). Financial Accounting: A Bridge to Decision Making. Cincinnati, OH: South-Western College Publishing.
Larson, Kermit D. (1997). Essentials of Financial Accounting. Boston: Irwin/McGraw-Hill.
Meigs, Robert F., Meigs, Mary A., Bettner, Mark, and Whittington, Ray. (1998). Financial Accounting. Boston: Irwin/McGraw Hill.
Needles, Belverd E., and Powers, Marian (1998). Financial Accounting. Boston: Houghton Mifflin.
Porter, Gary A., and Norton, Curtis L. (1998). Financial Accounting. Fort Worth, TX: Dryden Press.
ALLIE F. MILLER



Fin.org.ua

Інші статті енциклопедії




Пошук в Фінансовій енциклопедії


Debt can be a heavy weight,
But with patience and persistence, it can abate.
Cut your spending, and pay it down,
And soon your credit score will wear a crown.

- Fin.Org.UA

Новини

21:00 - Трамп оголосив "торговельну війну" проти всіх. Як реагує світ?
21:00 - Новини 3 квітня: світ реагує на мита Трампа, Кличко звільняє підозрюваних в корупції
20:37 - Дружина підозрюваного ексрадника ОП Шила придбала нерухомості у Дубаї на $4 млн – Радіо Свобода
20:26 - Apple втратила за день $250 мільярдів ринкової вартості через мита Трампа
19:55 - АРМА знайшло управителя для 10 арештованих суден: очікує щомісячні 6 мільйонів
19:17 - Українська IT-компанія Intellias відкриває офіс у Німеччині
19:00 - "Безглузді розрахунки": журналісти FT пояснили звідки взялись мита Трампа
18:43 - Україна отримала від Польщі нові термінали Starlink
17:58 - Після кібератаки: "Укрзалізниця" повідомила про повернення квитків
17:56 - У Трампа допускають зниження мит для країн, які дозволять більший імпорт з США
17:30 - Як ми вдосконалюємо систему закупівель для армії
17:29 - На Волині збудують вітрову електростанцію за гроші міжнародних банків
17:23 - Інтеграція до європейських енергетичних ринків: Міненерго та Єврокомісія обговорили спільні заходи за напрямами «ВДЕ» та «відновлювані гази»
17:00 - Крипта не оставляет попыток найти дно
16:58 - Керівника управління податкової на Сумщині затримали на хабарі: деталі
16:53 - Ціни на нафту стрімко падають після запроваджених Трампом мит
16:51 - Трамп вводить мита на авто: сотні мільярдів доларів імпорту під ударом
16:31 - "Національний кешбек" без міністрів: Свириденко і Кабмін не скористалися власною програмою
16:25 - Незаконне будівництво ресторанного комплексу на березі Дніпра: киянин отримав підозру
16:18 - В Україні цьогоріч вперше виплатили 25% компенсації за сільгосптехніку: де найбільше
16:06 - За пів року торгів "Земельний банк" приніс майже 600 мільйонів надходжень
15:51 - Торгівельна політика Трампа вдарила по США найсильніше – Bloomberg
15:42 - ВІДДІЛ КОМУНІКАЦІЙ З ГРОМАДСЬКІСТЮ УПРАВЛІННЯ ІНФОРМАЦІЙНОЇ ВЗАЄМОДІЇ ГУ ДПС У ДНІПРОПЕТРОВСЬКІЙ ОБЛАСТІ (ТЕРИТОРІЯ ОБСЛУГОВУВАННЯ - МІСТО ДНІПРО) ІНФОРМУЄ!
15:39 - США експортували рекордні обсяги зрідженого газу у березні
15:30 - Курси валют, встановлені НБУ на 04.04.2025
15:06 - Формула Трампа: як США рахували мита за торговим балансом
15:03 - В Україні великодній кошик подорожчав за рік на третину
14:59 - "Ситуація чутлива": Бюджет московія недоотримує 20% нафтогазових доходів другий місяць поспіль
14:40 - ОГТСУ вчасно виконав умову Меморандуму МВФ з незалежної оцінки Наглядової ради
14:36 - Автомобільний холдинг Porsche SE може повернутись до оборонного бізнесу


Більше новин

ВалютаКурс
Алжирський динар0.31085
Австралійський долар26.2939
Така0.33887
Канадський долар29.3408
Юань Женьміньбі5.6694
Чеська крона1.8345
Данська крона6.1455
Гонконгівський долар5.3155
Форинт0.114187
Індійська рупія0.48384
Рупія0.0024691
Новий ізраїльський шекель11.2049
Єна0.28305
Теньге0.082394
Вона0.028399
Ліванський фунт0.000462
Малайзійський ринггіт9.3072
Мексиканське песо2.0593
Молдовський лей2.3139
Новозеландський долар24.0903
Норвезька крона4.016
Саудівський ріял11.02
Сінгапурський долар30.9891
Донг0.0016024
Ренд2.1916
Шведська крона4.2771
Швейцарський франк48.0616
Бат1.20536
Дирхам ОАЕ11.2555
Туніський динар13.5164
Єгипетський фунт0.8171
Фунт стерлінгів54.473
Долар США41.3426
Сербський динар0.39134
Азербайджанський манат24.3149
Румунський лей9.212
Турецька ліра1.0898
СПЗ (спеціальні права запозичення)55.486
Болгарський лев23.4448
Євро45.8531
Ларі14.9868
Злотий10.9297
Золото127911.94
Срібло1342.37
Платина39827.39
Паладій39690.55

Курси валют, встановлені НБУ на 04.04.2025