Transaction cycles
The Accoutning System
REVENUE & RECEIPTS CYCLE
Statement of Financial position balances Statement of Comprehensive income classes of trans.
*Accounts receivable * Credit sales *Interest received
*Cash & cash equivalents *Sales returns *Cash sales
* Discount allowed *All receipts (revenue and other)
*Credit losses
Acquisition & Payments Cycle
Statement of Financial position balances Statement of Comprehensive income classes of trans.
*Accounts payable *Credit purchases *Discount received
*Cash purchases * Interest on late payments
*Purchases returns *Expenses
Inventory & production cycle
Statement of Financial position balances Statement of Comprehensive income classes of trans.
*Inventory *Cost of Sales
Payroll & personnel cycle
Statement of Financial position balances Statement of Comprehensive income classes of trans.
*Bank & cash *Accounts payable *Wages & salaries
Finance & Investment Cycle
Statement of Financial position balances Statement of Comprehensive income classes of trans.
*Share capital *Property, plant and equipment *Dividends paid *P/L on sale of asset
*Reserves * Investments *Profit or loss (reserves) *P/L on investment
*Long-term loans *Interest paid
Business Transaction Cycles & related activities
*To design products - Inv. & production cycle *To approve credit sales - Revenue & Receipts cycle
*To forecast cash needs - Finance & Investment cycle *To initiate back orders for goods out of stock
*To discharge employees - Payroll & personnel cycle - Revenue & Receipts cycle
*To receive vendor invoices- Acq. & payments cycle *Paying interest on a bank loan - Finance & Investment
*To prepare purchase orders - Acq. & payments cycle
The Accoutning System
REVENUE & RECEIPTS CYCLE
Statement of Financial position balances Statement of Comprehensive income classes of trans.
*Accounts receivable * Credit sales *Interest received
*Cash & cash equivalents *Sales returns *Cash sales
* Discount allowed *All receipts (revenue and other)
*Credit losses
Acquisition & Payments Cycle
Statement of Financial position balances Statement of Comprehensive income classes of trans.
*Accounts payable *Credit purchases *Discount received
*Cash purchases * Interest on late payments
*Purchases returns *Expenses
Inventory & production cycle
Statement of Financial position balances Statement of Comprehensive income classes of trans.
*Inventory *Cost of Sales
Payroll & personnel cycle
Statement of Financial position balances Statement of Comprehensive income classes of trans.
*Bank & cash *Accounts payable *Wages & salaries
Finance & Investment Cycle
Statement of Financial position balances Statement of Comprehensive income classes of trans.
*Share capital *Property, plant and equipment *Dividends paid *P/L on sale of asset
*Reserves * Investments *Profit or loss (reserves) *P/L on investment
*Long-term loans *Interest paid
Business Transaction Cycles & related activities
*To design products - Inv. & production cycle *To approve credit sales - Revenue & Receipts cycle
*To forecast cash needs - Finance & Investment cycle *To initiate back orders for goods out of stock
*To discharge employees - Payroll & personnel cycle - Revenue & Receipts cycle
*To receive vendor invoices- Acq. & payments cycle *Paying interest on a bank loan - Finance & Investment
*To prepare purchase orders - Acq. & payments cycle
