Accounting Cycle Paper 3

Accounting Cycle

I do not work for a company and my wife does not work in an area that would give her an idea of how their accounting cycle works. I will work on describing the accounting cycle in this paper instead because I am unable to do what the paper is supposed to be.
The accounting cycle has nine procedures that lay out the logical sequence. The procedures are:
  1. Enter the transactions of the period in appropriate journals.
  2. Post from the journals to the ledger (or ledgers).
  3. Take an unadjusted trial balance.
  4. Prepare adjusting journal entries and post to the ledger(s).
  5. Take a trial balance after adjusting (adjusted trial balance).
  6. Prepare the financial statements from the second trial balance.
  7. Prepare closing journal entries and post to the ledger(s).
  8. Take a trial balance after closing (post-closing trial balance).
  9. Prepare reversing entries (optional) and post to the ledger(s) (Kieso, 2007).
Although the GAAP has its guide lines there is no simple rule that lies out what should or should not be recorded by a company. Enter the transactions of the period in appropriate journals is, according to the FASB, “transactions and other events and circumstances that affect a business enterprise” to describe the sources or causes of changes in an entity’s assets, liabilities, and equity. There are two types of events external events and internal events. The external events are interaction between an entity and its environment, such as a transaction with another entity, a change in the price of a good or service that an entity buys or sells, a flood or earthquake, or an improvement in technology by a competitor. The internal events occur within the entity, such as buildings and machinery in operations, or transferring or consuming raw materials in production processes (Kieso, 2007).
Post from the journals to the ledgers to record in accounts those transactions and events that affect its assets,... [continues]

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