Accounting Cycle Description Paper Team A
Accounting Cycle Description Paper
Jennifer Pinegar, Stephen Neumann, Zachary Galas
ACC/340
July 21, 2015
Mark Kolesinsky
Accounting Cycle Description Paper
Riordan Manufacturing is global leader in plastics with a projected annual earnings of $46 million. They operate out of California, Michigan, and Georgia along with a joint venture in China. Each of the operations has its own finance and accounting system. Their conversion of the accounting cycle has helped them to earn their success. This paper will classify the five accounting cycles and one will be chosen to be a basis for this paper. The strengths and weaknesses of the internal controls related to the cycle will be distinguished along with an explanation of how Riordan has integrated this part of the accounting cycle into an enterprise-wide accounting system. Lastly, a differentiation between the various types of information systems that were necessary for Riordan to achieve the integration will be discussed.
There are five accounting cycles that a business can use. Each cycle reveals different types of business activities. The cycles are revenue, expenditure, conversion, financing, and fixed asset. Revenues includes sales and cash receipts. Sales is all revenue earned from products sold to their customers. Cash receipts is all cash that is brought in. Expenditures is what the company spends to keep the company profitable. This would include the money spent on supplies, or paying their employees to work. The conversion cycle which is also considered the production cycle is an account of all production in a business. It allocates the costs to the production and makes sure everything is accurately expensed. The financing cycle accounts for all stock, bonds, debts, and dividend transactions. Lastly, the fixed asset cycle is accounting for all fixed assets of the business. This will include purchasing, selling, and depreciation of all major assets.
The expenditure cycle is an importance cycle for Riordan
Jennifer Pinegar, Stephen Neumann, Zachary Galas
ACC/340
July 21, 2015
Mark Kolesinsky
Accounting Cycle Description Paper
Riordan Manufacturing is global leader in plastics with a projected annual earnings of $46 million. They operate out of California, Michigan, and Georgia along with a joint venture in China. Each of the operations has its own finance and accounting system. Their conversion of the accounting cycle has helped them to earn their success. This paper will classify the five accounting cycles and one will be chosen to be a basis for this paper. The strengths and weaknesses of the internal controls related to the cycle will be distinguished along with an explanation of how Riordan has integrated this part of the accounting cycle into an enterprise-wide accounting system. Lastly, a differentiation between the various types of information systems that were necessary for Riordan to achieve the integration will be discussed.
There are five accounting cycles that a business can use. Each cycle reveals different types of business activities. The cycles are revenue, expenditure, conversion, financing, and fixed asset. Revenues includes sales and cash receipts. Sales is all revenue earned from products sold to their customers. Cash receipts is all cash that is brought in. Expenditures is what the company spends to keep the company profitable. This would include the money spent on supplies, or paying their employees to work. The conversion cycle which is also considered the production cycle is an account of all production in a business. It allocates the costs to the production and makes sure everything is accurately expensed. The financing cycle accounts for all stock, bonds, debts, and dividend transactions. Lastly, the fixed asset cycle is accounting for all fixed assets of the business. This will include purchasing, selling, and depreciation of all major assets.
The expenditure cycle is an importance cycle for Riordan