Name : Gusti Ayu Putu Agustini (16651015)

Class : 6B – Managerial Accounting

Accounting Cycle In Service Company

The company accounting cycle is a series of various stages carried out systematically
with the aim of processing various proofs of financial transactions to produce a financial
statement or accounting information on a company or organization in a given period. In
general, the accounting cycle is always understood from the transaction to the preparation of
financial statements and proceed with the balance closed with the closing journal or arrive at
the inverting journal.
In accounting science, the accounting cycle can be broadly divided into two types,
namely the service company accounting cycle and the trading company accounting cycle, but
the stages are not much different. The difference is only in the process of business activities
and products produced, the products produced by service companies are intangible products
that can be directly felt by benefits such as car services, salons and consultants. while the
trading company of the products produced has forms such as food, drinks and equipment. So
the proof of trading company transactions is more varied and the journals used are not only
general journals but also special journals.
In a service company is a company that sells and provides services to meet consumer
needs with the aim of earning profits. In other words, service companies sell goods that are
intangible and products that are produced are not standard or varied.
In addition, in making financial reports on service companies there are eight stages
known as the accounting cycle. The first stage is collecting financial data that is valid,
accurate and accountable. Then record it in a general journal. After that, move the data from a
large general journal. The second stage is to create a trial balance to assess the process of
recording data from a general journal to a ledger (posting) and if the debit and credit are
balanced, it means there are no errors in inputting data. The third stage is the preparation of
adjusting journals that are made when the transaction takes place that affects the company
account.
The fourth stage is the preparation of the balance sheet that refers to the trial balance
and adjusting journal. The fifth stage is making financial statements on the basis of the work
sheet that has been done, the financial statements consist of income statements, balance
sheets and reports of changes in capital. The sixth stage is to make a closing journal, on the
estimated accounts in the capital change report and the income statement that is in the service
company will be closed. These accounts include expenses, profit and loss and prive.
 The seventh stage is the reversing journal stage, the reversal stage of some accounts
that have been closed to return the balance. Estimated accounts that are usually reversed are
payments that are prepaid and have not matured and the last stage or eighth stage, namely
making a final or initial balance sheet (after closing), called the final or initial balance sheet
because as the final balance sheet is produced at the end of the period will be used as the
initial balance sheet in the accounting cycle of the following period.
So, there are eight stages in the service company's accounting cycle starting from
transaction analysis to creating the final or initial balance sheet (after closing). The
accounting cycle is needed as a guideline for accountants when they want to make financial
statements. An accountant must know and understand about a series of accounting cycles
because if only one stage is not understood and missed, the results of the financial statements
will not be in accordance with the company's expectations and the standards set out in the
PSAK.