Accounting Cycle Questions and Graded Answers.
What is The accouting cycle? - The accounting cycle is the process of gathering,
preparing, analysing and reporting the activities of the business during one accounting period so
that business and other decisions can be made.
Step 1 - Collect and analyse infomation from source documents
Step 2 - Journalise transactions
Step 3 - post transaction to ledger accounts
Step 4 - Prepare a trial balance
Step 5 (2 stages) - 1. Journalise and post adjusting entries -balance day adjustments
2. Prepare and adjusted trial balance
Step 6 - Prepare financial statements
Step 7 (2 stages) - Close the accounts
1. journalise and post closing entries
2. Prepare a post closing trial balance
Why is the accounting cycle important? - The accounting cycle is important because it
gives meaningful comparrisons of operating results during one accounting period and others.
What is The accouting cycle? - The accounting cycle is the process of gathering,
preparing, analysing and reporting the activities of the business during one accounting period so
that business and other decisions can be made.
Step 1 - Collect and analyse infomation from source documents
Step 2 - Journalise transactions
Step 3 - post transaction to ledger accounts
Step 4 - Prepare a trial balance
Step 5 (2 stages) - 1. Journalise and post adjusting entries -balance day adjustments
2. Prepare and adjusted trial balance
Step 6 - Prepare financial statements
Step 7 (2 stages) - Close the accounts
1. journalise and post closing entries
2. Prepare a post closing trial balance
Why is the accounting cycle important? - The accounting cycle is important because it
gives meaningful comparrisons of operating results during one accounting period and others.
