Question

Assume that you are the Financial Accountant of a newly started business from your chosen in August 2020

FIRST ASSIGNMENT (1)

Step 1 – Analyze Business Transactions (Accounting Cycle)

You are requested to assume the chosen business transactions during the month of August 2020 and analyze it by shown the impact of these transactions on the accounting equation!

SECOUND ASSIGNMENT (2)

Step 7 Accounting Cycle – Prepare Financial Statements

You are requested using the information of Step 1 to prepare the financial statements of your chosen business for the month of August 2020.

THIRD ASSIGNMENT (3)

Step 2 Accounting Cycle – Journalize Business Transactions

You are requested to journalize the assumed transactions for your chosen business during the month of August 2020!

FOURTH ASSIGNMENT (4)

Step 3 Accounting Cycle – Post Business Transactions

Based on the work in step 2 of the accounting cycle [Journalize the transactions], You are requested to Post the assumed transactions for your chosen business during the month of August 2020!

FIFTH ASSIGNMENT (5)

Step 4 Accounting Cycle – Prepare Trial Balance

Based on the work in step 3 of the accounting cycle [Post Business Transactions], You are requested to prepare the trial balance for your chosen business during the month of August 2020!

SIXTH ASSIGNMENT (6)

Step 7 Accounting Cycle – Prepare Financial Statements  

Based on the work in step 4 of the accounting cycle [Prepare Trial Balance], You are requested to prepare the financial statements for your chosen business during the month of August 2020!

These are 6 assignment that should solve it of the accounting cycle and please I have to solve it like exercise not explaining!!

I want to solve the question in a very clear and orderly form, and in the event that the solution is by handwriting please be clear and each step must be clarified in its solution

This is an Calculation Assignment. Assume a financial transaction as in August 2020 From a chosen company or from your Own so you can do the 9 steps from that Business Cycle Steps, Cover the 9 steps in Business Cycle in Separated Tables From your Financial Transaction . PLEASE DO COVER ALL THE 9 STEPS CORRECTLY as they are all related and - please Do all of the steps according to your assume transactions otherwise its not acceptable and correctly. Do them in Separated Tables.

Answer 1

Accounting cycle is a process of a complete sequence of accounting procedures in appropriate order during each accounting period. Accounting process is a combination of a series of activities that begin when a transaction takes place and ends with its inclusion in the financial statements at the end of the accounting period.

The sequence of accounting procedures used to record, classify and summarize accounting information is often termed the Accounting Cycle.

The term indicates that these procedures must be repeated continuously to enable the business to prepare new up-to-date financial statements at reasonable intervals.

10 Steps of Accounting Cycle are;

1. Analyzing and Classify Data about an Economic Event.
2. Journalizing the transaction.
3. Posting from the Journals to General Ledger.
4. Preparing the Unadjusted Trial Balance.
5. Recording Adjusting Entries.
6. Preparing the Adjusted Trial Balance.
7. Preparing Financial Statements.
8. Recording Closing Entries.
9. Preparing a Closing Trial Balance.
10. Recording Reversing Entries.

Collecting and analyzing data from transactions and events. Recording Reversing Entries Journalizing the transaction Preparinga Closing Trial Balance Posting entries to the general ledger accounting cycle Recording Closing Entries Preparing an unadjusted trial balance Preparing Finandal Statements Recording Adjusting Entries Preparing an adjusted trial balance

1. Analyzing and Classify Data about an Economic Event

   Identifying the transactions from the events is the first step in the accounting process.

   Events are analyzed to find the impact on the financial position or to be more specific the impacts on the accounting equation.

   Documents such as; a receipt, an invoice, a depreciation schedule, and a bank statement, etc. provide evidence that an economic event has actually occurred.

2. Journalizing the transaction

   Transactions having an impact on the financial position of a business are recorded in the general journal.

   In the general journal, the transactions are recorded as a debit and a credit in monetary terms with the date and short description of the cause of the particular economic event.

3. Posting from the Journals to the General Ledger

   Transactions recorded in the general journal are then posted to the general ledger accounts.

   The accounts classify accounting data into certain categories and they are recorded in general journal entries according to that classification.

   Depending on the frequency of the transactions posting to ledger accounts may be less frequent.

4. Preparing the Unadjusted Trial Balance

   To determine the equality of debits and credits as recorded in the general ledger, an unadjusted is prepared. It is a way to investigate and find the fault or prove the correctness of the previous steps before proceeding to the next step.

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   Unadjusted trial balance makes the next steps of the accounting process easy and provides the balances of all the accounts that may require an adjustment in the next step.

   The unadjusted balance sheet is for internal use only.

5. Recording Adjusting Entries

   Adjusting entries ensure that the revenue recognition and matching principles are followed. To find the revenues and expenses of an accounting period adjustments are required.

   Adjusting entries are required to be is because a transaction may have influence revenues or expenses beyond the current accounting period and to journalize to the events that not yet recorded.

6. Preparing the Adjusted Trial Balance

   An adjusted trial balance contains all the account titles and balances of the general ledger which is created after the adjusting entries for an accounting period have been posted to the accounts.

   It is an internal document and is not a financial statement.

   It helps to create the income statement and balance sheet and provide enough information for preparing the cash flow statement.

7. Preparing Financial Statements

   Financial statements are prepared from the balances from the adjusted trial balance. The financial statements are made at the very last of the accounting period.

   Cash flow statement, income statement, balance sheet and statement of retained earnings; are the financial statements that are prepared at the end of the accounting period.

   This is the output of the accounting process, which is used by the interested parties both within and out of the organization.

8. Recording Closing Entries

   At the end of an accounting period, Closing entries are made to transfer data in the temporary accounts to the permanent balance sheet or income statement accounts.

   Transferring the balances of the temporary accounts or nominal accounts (e.g. revenue, expense, and drawing accounts) to the owner’s equity or retained earnings account is used because these types of accounts only affect one accounting period.

9. Preparing a Closing Trial Balance

   To make sure that debits equal credits, the final trial balance is prepared. As the temporary ones have been closed only the permanent accounts appear on the closing trial balance to make sure that debits equal credits.

10. Recording Reversing Entries

    Posit closing entries is an optional step of the accounting cycle. A reversing journal entry is recorded on the first day of the new period for avoiding double counting the amount when the transaction occurs in the next period.

The primary objective of the accounting cycle in an organization is to process financial information and to prepare financial statements at the end of the accounting period.

An accounting cycle is a continuous and fixed process that needs to be followed accordingly. Maintenance of the continuity accounting cycle is important.