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  • Accounting Cycle

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    basitmehmoodbukhari
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    The accounting cycle document outlines the 7 steps of the accounting process: 1) a monetary event occurs that changes the business's financial position, 2) source documents provide original information about the event, 3) the event is recorded in books of prime entry, 4) transactions are then recorded through double-entry bookkeeping in accounts, 5) a trial balance is prepared, 6) a trading and profit & loss account is prepared, and 7) a balance sheet is prepared. Cash books serve as both a book of prime entry and a double-entry account.

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    The accounting cycle document outlines the 7 steps of the accounting process: 1) a monetary event occurs that changes the business's financial position, 2) source documents provide original information about the event, 3) the event is recorded in books of prime entry, 4) transactions are then recorded through double-entry bookkeeping in accounts, 5) a trial balance is prepared, 6) a trading and profit & loss account is prepared, and 7) a balance sheet is prepared. Cash books serve as both a book of prime entry and a double-entry account.

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    © All Rights Reserved
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    4 views1 page

    Accounting Cycle

    Uploaded by

    basitmehmoodbukhari
    The accounting cycle document outlines the 7 steps of the accounting process: 1) a monetary event occurs that changes the business's financial position, 2) source documents provide original information about the event, 3) the event is recorded in books of prime entry, 4) transactions are then recorded through double-entry bookkeeping in accounts, 5) a trial balance is prepared, 6) a trading and profit & loss account is prepared, and 7) a balance sheet is prepared. Cash books serve as both a book of prime entry and a double-entry account.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Accounting Cycle

    Accounting Cycle
    1. Occurrence of monetary event
    This is the event due to which financial position of the business is changed.
    2. Source documents (original information)
     Purchases and sales invoices
     Bank payment and receipt(cheques/pay-in slips)
     Cash payment and received receipts
     Other financial correspondence
    3. Book of original Entry or Day Book or Books of prime entry (Classification)
     Sales day book
     Sales return day book
     Purchases day books
     Purchases return day book
     Cash books
     Petty Cash book
     The Journal
    4. Double entry accounts (Record dual aspect of above transaction)
     General Ledger
     Sales Ledger
     Purchases Ledger
     Cash Books
    5. Trial Balance
    6. Trading and Profit and Loss Account
    7. Balance Sheet
    *Cash books satisfy both books of prime entry and double entry purpose.

    Khalfan Shah FCCA, APFA (khashah.mentor@gmail.com)


    Imperial Institute of Professional Studies

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