The Purpose Of This Paper Will Be Identifying The Steps

1417 WordsFeb 19, 20176 Pages
The purpose of this paper will be identifying the steps of the accounting cycle and providing a brief description of each step that companies take to create their financial statements. Further discussion will explain what role each step plays in the success of a business. Plus, further discussion will be how omission of a step could impact the success of a business, and what strategies could be used to avoid this. Finally, the major financial statements that come out of the accounting will be discussed, as well as their importance. The accounting cycle report will provide an overview of the accounting cycle steps, their role, omission of a step, and financial statements. The most important part of any business is making sure financial…show more content…
Steps 4-10 are also very important to a business’s financial well-being. These steps lead a business to having documents that start showing how they are operating. With this information businesses can see what is working for them and what needs to be changed. The documents inform businesses their current assets against their liabilities. If businesses were not able to see this information then they would not be able to make effective and efficient decisions for the business’s success. All ten steps of the accounting cycle are used for companies to create their financial statements through a specific time period, and each step has a vital role in the success of a business. The omission of any step in the accounting cycle could impact the success of a business. Omissions of transaction practices are primarily seen within small business, but they still happen in any type of business. Some business owners will be dishonest when it comes to their accounting system, and try to benefit from it. An owner could possibly use extra money for personal needs, cut out expenses, buy expensive products through business, falsify a report with personal expense instead of business expense, and even not record acquired income. In order to have a successful business and avoid these omissions, companies put systems in place when transactions may not seem right. One example is having one or two people sign off
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