Accounting Cycle, Know the Main Stages to How to Make It

The field of accounting does have a very important role so that the sustainability of a company or business can be well monitored. This is suspected because accounting based on Bookkeepers Silverwater has the main objective as a provider of information that can be used to make important decisions in maximizing the performance of a business. To be able to get the information needed, an accountant will usually carry out a variety of activities. Accountants are responsible for collecting data and process it systematically in a certain period. Usually, the series is carried out in one year.

In compiling the accounting cycle, the first thing to do is to collect all the transactions in a certain period. You need various sources of transaction documents such as invoices, receipts, cash receipts, and so on. Make sure that you have all the financial documents within the specified period. That way, the financial cycle report will be detailed and can be accounted for. The Journal of accounting transactions is a summary and record of transactions carried out by companies or businesses. Usually, the recording and summary container is called a journal book. In transferring records in the journal to the general ledger, it must be adjusted to the type of transaction and also the estimated name of each transaction. The activity of moving records from journals to ledgers is also often referred to as posting.

Next, the general ledger contains a collection of accounts for certain assets or assets of all related companies. That way, accounting reports in the general ledger can become a single unit and have a more complete and detailed explanation. In preparing a trial balance, you only need to copy the balance value of each account in the ledger. Although it’s fairly easy, you need to calculate the amount of balance in the ledger, but the process of preparing a trial balance can be easier and less error-free. If there is a mistake in the journaling or posting process, you need to keep an adjusting entry. An adjustment journal also needs to be made to ensure that all costs and income have been recorded in the right period or time.