Accounting Cycle
In the general point of view, an accounting cycle refers to certain procedures that must be established by every business unit to provide the data to be reported on the financial statements. The accounting process consists of two interrelated parts: the recording phase and the summarizing phase. Although these phases vary in details depending on the nature of the business, the main purpose is just the same - to be able to provide an accurate report containing the firm's condition and the result of its operation. To clearly illustrate the complete accounting cycle of a finance company, let us take as an example Dann & Berns, Inc. The company is engaged in providing business analysis including credit investigation, a thorough study of the company profile, review of the client's financial statements, and providing an overall rating of the clients, whom we will call as subjects in this example. Among Dann & Berns' subjects include big companies who are applying for accreditation as a distributor of another firm; applicant verification for banks and other financial institutions offering various types of loans, as part of their pre-approval requirements; outsourcing companies and other headhunting firms for hire-right purposes; a
2.A system-generated trial balance in a worksheet form will be downloaded, containing a summary of information as classified in the ledger. A check on the accuracy of the recording and posting will be conducted by the assigned person or a supervisor. 1.Appropriate business documents are received. The documents received by the accounting department provide the basis for making an initial record for the transaction. These may originate from any department depending on the nature of the transaction such as invoice billings from operation and other support groups, copies of purchase orders, official receipts, delivery receipts, and other evidence of business transactions requiring accounting recognition; or internal transactions representing transfers of costs within the business. 6. A post-closing trial balance is taken. A trial balance is taken to determine the equality of the debits and credits after posting the adjusting and closing entries. Transactions are recorded. Based upon the supporting documents from Step 1 above, each transaction is recorded in chronological order and is automatically posted to the appropriate accounts in the general and subsidiary ledgers once the accounting personnel in-charge input the information in the computerized accounting system in use. 4.Financial statements are prepared. Reports can be generated from the accounting system. This includes the statements of financial condition, results of operation, cash flow, and changes in retained earnings. nd others from different industries. To be able to provide the necessary services, Dann & Berns is hiring very senior financial professionals for these functions. These professionals are required to have a solid background in finance and account
Some common words found in the essay are:
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Approximate Word count = 1177
Approximate Pages = 5 (250 words per page double spaced)
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