会计英语2THE ACCOUNTING CYCLE.pptVIP

CHAPTER 2  THE ACCOUNTING CYCLE Learning Objectives: After studying this chapter, you should be able to: Understand economic events and business documents Understand T accounts and debit credit rules Journalize and post transactions Prepare a trial balance Understand the need for adjustments Prepare the financial statements Understand the need for closing Understand the accounting cycle 2.1 Accounting Cycle In order to report on the periodic progress of the entity over time, its life is divided into arbitrary time periods of equal length called accounting periods. The length of the accounting period depends on the needs of interested parties. yearly statements half-yearly statements quarterly statements Monthly statement Weekly statement During each period, steps and procedures are followed within the accounting function to ensure that all transactions are properly recorded, and records are kept to ensure that the financial statements can be prepared at the end of accounting period. The sequence of procedures used to keep track of what has happened in the business and to report the financial effect of those things is called accounting cycle. Required Steps in the Accounting Cycle 1 Analyze business transactions 2 Journalize the transactions 3 Post to ledger accounts 4 Prepare a unadjusted trial balance 5 Journalize and post adjusting entries 6 Prepare an adjusted trial balance 7 Prepare financial statements 8 Journalize and post closing entries 9 Prepare a post-closing trial balance 2.2 Analyze Business Transactions It is usual to record a business transaction on a document. Such documents include invoices, credit notes and goods received notes, checks, purchase order, employee earnings record, bank statement in terms of the accounting system these are known as source documents.  Purpose of source documents it provides written evidence of a transaction and is used by the accounting department as support for entries in the ac