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The Full Accounting Cycle And Present A Quick Synopsis Of All Of The Steps

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The purpose of this paper is to discuss the full accounting cycle and present a quick synopsis of all of the steps along with a brief description on how it can impact a business’s success. The role of each step and why each step is critical in this process will also be explained. The omission of a step, no matter how small, could negatively impact the financial security of a business. The four basic financial statements and why they are important will be the final segment in discussing the full accounting cycle.
The point of the accounting cycle is to gather all financial information for a company within a certain period of time and additionally at the end of a period to finalize all account amounts. The cycle starts with the beginning …show more content…

These adjusted entries will now be journalized and the preparation for the adjusted trial balance begins. The adjusted trial balance has the balances of expenses and revenues and the amounts for all equities, assets, and liabilities. The financial statements are now ready to be prepared after completing the adjusted trial balance. The financial statements are a formal representation of the financial success and position of the business and shows how this position has grown or depleted over time. Now you will journalize and post the closing entries. These entries are created at the end of the specific accounting period and transfers the account balances of temporary accounts to permanent accounts. Last but not least, you will prepare the post-closing trial balance. This is the process in which you list all accounts and balances in the closing of an accounting period; these items listed will only be permanent accounts. The purpose of preparing a post-closing trial balance is to be certain that all balances of debits and credits are equal in order for the next accounting cycle to begin effectively and efficiently. Each step plays a vital role in a business’s success. If one step is miscalculated, then all steps proceeding will have incorrect values. The entire process will need to be recalculated if this error were to occur. Accurately journalizing every account certifies the

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