Friday, January 17, 2014

What are the 5 accounting cycles?

What are the 5 accounting cycles?
An accounting cycle begins when accounting personnel create a transaction from a source document and ends with the completion of the financial reports and closing of temporary accounts in preparation for a new cycle. The five accounting cycles and their main steps are shown below: a. Revenue cycle1) Sales orders3) Cash receiptsb. Expenditure cycle (Note: This cycle focuses on two separate resources; inventory and human resources and is often considered two separate cycles; purchasing and payroll/HR. )1) Inventory/purchasing2) Accounts payable3) Payroll4) Cash paymentsc. Conversion cycle (Production cycle)1) Production2) Cost accountingd. Financing (Capital Acquisition and repayment)1) Borrowing/repayment2) Issuing stock3) Dividends4) Cash managemente. Fixed assets1) Asset acquisition2) Depreciation3) Disposal

No comments:

Post a Comment