ACC 201 MODULE TWO SHORT PAPER
(This entire first page can be deleted after you review the guidelines. Your paper should begin with the title page that follows.)
Review the Module Two Short Paper Guidelines and Rubric document to see how your paper will be scored.
Be sure to follow APA format when providing references. If you have questions on APA formatting, you can check the Purdue OWL website or seek help from the SNHU Writing Lab.
Notes on APA in a Formal Assignment
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- Delete the headings for “Introduction” and “Conclusion” in the template. These headings are included below to help you lay out your paper. APA format assumes that the introduction begins the paper, the body continues the paper, and the conclusion wraps up the paper, so those headings are not needed.
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ACC 201 Module Two Short Paper: The Accounting Cycle
[Your Name]
Southern New Hampshire University
The Accounting Cycle
Accounting cycle is the financial routine of receiving, putting on record, sorting out, and crediting of payments made as well as received in a firm within a given accounting time. In other words it is a term used to refer to steps taken to process transactions. It is thus a sequence of financial procedures within an organization.
Accounting steps: analysis and classification economic events data for example a bank statement, transaction recording for example a general journal, creating ledgers for example general ledger, making unadjusted trial balance for example unadjusted balance sheet, adjusting entries for example expenses, creation of adjusted trial balance for example adjusted balance sheet, making financial statement for example income statement, making closing entries for example transfer of nominal accounts balance to owner’s equity, creating a closing trial balance for example final trial balance, and finally recording of reversing entries (Boyd & Pitre, 2019).
The products of the accounting cycle are the statements of finance which include balance sheet, cash flow statements, and income statements as well as owner’s equity charges statement.
They are important in communicating on how the company has been operating the whole accounting period and also provide information used in decision making both for management and investors. The end results of the accounting cycle are thus the balance sheet, cash flow statements, and income statements as well as owner’s equity charges statement (Warren, Reeve & Duchac, 2017). Importance of the financial statements is that they communicate to the various shareholders on the operations of the entity for the given accounting period, help to evaluate the management performance, and also it communicates on the entity’s ability to pay back the borrowed funds in the case of loans.
The most important part of accounting cycle is identification of the transactions to record as it helps in classifying them accordingly .Wrong identification can lead to errors throughout the accounting cycle (Warren, Reeve & Duchac, 2017).. However, I don’t believe any step is more important than the others. They are all important and needed in order to complete the accounting cycle.
Accounting cycle is an important aspect of business management and financial planning. It helps the firm to project it budgets and plan for the future. The series of step makes the business track its daily activities and makes necessary changes for successful learning of the organization.
References
Boyd, J., & Pitre, R. (2019). Creating relevance in managerial accounting. Journal of Education for Business, 1-4.
Warren, C.S., Reeve, J. M., & Duchac, J. (2017). Corporate financial accounting (14th ed.). Boston, MA: Cengage Learning.
