Accounting Cycle: Generally Accepted Accounting Principles

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Joana Miller
Accounting Cycle
ACC/421 Intermediate Financial Accounting I
April 30, 2012

Somerset properties keep its books in order in a clear, concise, complete way that their tax accountant is happy to work with them. Wesco property management maintained solid account practices. The have three different properties to manage so it is important to keep daily record of each transaction. The three of these different properties report to corporate office that is located in Montebello, California.

The daily transactions procedure, comply with the Generally Accepted Accounting Principles (GAAP).
The financial statements are prepared monthly and at the end year.
Somerset property, register each daily transaction in a journal. The revenue for Wesco is based in the rent income, each tenant’s rent payment is recorded in a journal, (tenants signed an agreement to pay the first of each month their rent), so is not need to bill them. To maintain the property in good conditions the company keep record of all the expenses incurred in the month, which includes gardening, painters, cleaning, and purchasing. Also the company has a mortgage and big projects like re-plastering the pool. Each transaction is classified and recorded daily or monthly in the appropriate journal. These entries or posting are recorded as debit and credit (debits need to be equal credits).

Posting, each account is transferred from the daily journal to a ledger, each ledger is classified by names and accounts number such liabilities, revenue, and expense accounts, etc.
To ensure that debits equals the credits the company prepares an unadjusted trial balance that includes all the accounts and their balances at a certain period, any adjustment or correction can be performed at this point if it is necessary and posted to ledgers followed...
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