Accounting cycle:

Accounting is the system that identifies records and communicates the

information that is relevant, reliable and comparable. And the accounting cycle is 8
series steps which are repeated in every single report period. Accounting cycle
starts with analyzing and journalizing the transactions as they were founded. Next
step is to adjusting journal entries to general ledger accounts. After that comes the
step which is to post the transactions. Next step is to prepare a trial balance sheet.
Next is to create a worksheet. Followed by journalizing and posting the adjusted
entries. Next step is to prepare a financial statement. Then journalize and closing
entries. Final step is to prepare after closing the books.

Accounting cycle steps:

It has 8 steps which am going to describe each of them separately.

Analyzing and journalizing the transactions.

In this step business transaction of some sort happens such as sale or return, a
purchase or purchase return of inventory or any other type of transaction. And the
Business documents (purchase orders, receipts, invoices, etc.) are created.

Adjust the journal entries to the general ledger accounts.

The next step is to list the data in appropriate journal; maintain order time to
any transactions. This journal also known as "original book of entry", which is the
first place to list transactions.

Post the transactions.

In this step the transaction are posted in the account that impacts. Which
they are a part of the general ledger account, where you can fine full summary of all
the business accounts.

Prepare trial balance sheet.

Trial balance sheet is a list of account titles on specific date, which shows all
debits and credit in double entry account, with any disagreement including the
errors.

Worksheet.

The worksheet is an optional step in the accounting cycle; it gives the

organization information about results for period of time. Moreover it has 5 sets of
DR and CR columns. Many accountants use it to prepare unadjusted trial balance
sheet, and then to prepare financial statement.

journalizing and posting the adjusted.

DATE

PARTICULARS

DR
RM

CR
RM

10-Jan
1 Cash A/C

105,0
00

To Capital A/C

105,000

(Started
business)

2 Bank A/C

90,00
0

To Cash A/C

90,000

(cash deposited
into
bank)

3 Purchase A/C

5,500

To Cash A/C

5,500

(Good
purchased
for cash

4 Purchase A/C

2,400

To Eddy A/C

800

To Frankey A/C

930

To Smith A/C

160

To Liew A/C

510

(Purchase good
on
credit )

5 Stationery A/C

89

To Bottons A/C

89

(Stationery on
credit )

6 Tomy A/C

170

Eric A/C

240

Malcom A/C

326

Tim A/C

204

To Sales A/C

940

(Sold good on
Credit )

8 Rent A/C

220

To bank A/C

220

(Rent paid by
cheque )

10 Fixtures A/C
To Chiefs Bhd
A/C
(Fixture on
credit )

610
610

11 Salaries

790

To cash A/C

790

(Salaried paid )

14 Franky A/C
Smith A/C

30
42

(Good return)

15 Van A/C

72

6500

To Bank A/C

6500

(Van purchase )

16

Bank account
A/C

2000

To Loan A/C

2000

(Received Loan
from
Barclay)

18 Tomy A/C
Malcom A/C

5
20

(Good return )

21 Cash A/C
To Sales A/C
(Cash sales )

25

145
145

24 Eric A/C

130

Tim A/C

410

Paul A/C

158

To Sales A/C

698

(Good sold on
credit

26 Frankey A/C
Smith A/C

900
118

To Bank A/C

1018

(Emma paid the

amount by
cheque )

29 Bank A/C

528

To Paul A/C

158

TO Eric A/C

370

(Received
cheque )

30 Cash A/C

500

To loan A/C

500

(Received loan)

30 Cash A/C

614

Cash Account
2010
Jan

RM

2010
Jan

RM

1-Jan

Capital

105,0
00

Bank

90,00
0
5,500

21

Sales

145

Purchase
s

30

Barclay

500

11

Salaries

790

Tim

614

Balance
c/d

9,969

106,2
59
Balance
b/d

106,2
59

9,969

Capital Account
2010
Jan
Balance
c/d

RM

2010J
an

105,0
00

RM
Cash

105,0
00

105,0
00

105,0
00
Balance
b/d

105,0
00

Bank Account
2010
Jan

RM

2010
Jan

RM

Cash

90,00
0

16

Barclay

2,000

15

Van

6,500

29

Paul

158

26

Franky

900

Eric

370

Smith

118

Balance
c/d

84,79
0

Rent

220

92,52
8
Balance
b/d

92528

84,79
0

Purchases Account
2010
Jan

RM

Cash

5,500

Eddy

800

Franky

930

Smith

160

Leiw

510
7,900

Balance
b/d

7,900

2010
Jan

RM
Balance
c/d

7,900

7,900

Eddy Account
2010
Jan

RM
Balance
c/d

800

2010
Jan
4

RM
Purchase
s

800

800

800
Balance
b/d

800

Franky Account
2010
Jan

RM

2010
Jan
4

14

Purchahse return

30

26

Bank

900

930

Smith Account

RM
Purchase
s

930

930

2010
Jan

RM

2010
Jan
4

14

Purchases return

42

26

Bank

118

RM
Purchase
s

160

160

160

Liew Account
2010
Jan
Balance
c/d

RM

2010
Jan

510

RM
Purchase
s

510

510

510
Balance
b/d

510

Stationery Account
2010
Jan
5

RM
Buttons
Ldt

89

89

2010
Jan

RM
Balancec
/d

89

89

Balance
b/d

89

Buttons Ltd Account

2010
Jan

RM
Balance
c/d

89

2010
Jan
5

RM
Stationer
y

89

89

89
Balance
b/d

89

Sales Account
2010
Jan
Balance
c/d

RM

2010
Jan

1783

RM
Tomy

170

Eric

240

Malcom

326

Tim

204

21

Cash

145

24

Eric

130

Tim

410

Paul

158

1783

1783
Balance
b/d

1783

Tomy Account
2010
Jan

RM

Sales

170

18

Purchases return

2010
Jan

RM
Balance
c/d

175
Balance
b/d

175

175

175

Eric Account
2010
Jan

RM

2010
Jan
29

Sales

240

24

Sales

130

370

RM
Bank

370

370

Malcom Account
2010
Jan

RM

Sales

326

18

Purchases return

20

2010
Jan

RM
Balance
c/d

346
Balance
b/d

346

346

346

Tim Account
2010
Jan

RM

2010
Jan
30

Sales

204

24

Sales

410

614

RM
Cash

614

614

Rent Account
2010
Jan
8

RM
Bank

2010
Jan

RM
Balance
c/d

220

220
Balance
b/d

220

220

220

Fixtures Account
2010
Jan
10

RM
Chiefs Bhd

2010
Jan

RM
Balance
c/d

610

610
Balance
b/d

610

610

610

Chiefs Account
2010
Jan
Balance
c/d

RM

2010
Jan

610

10

RM
Fixtures

610

610

610
Balance
b/d

610

Salaries Accaunt
2010
Jan
11

RM
Cash

2010
Jan

RM
Balance
c/d

790

790
Balance
b/d

790

790

790

Purchases return Account

2010
Jan
Balance
c/d

RM

2010
Jan

97

14

RM
Franky

30

Smith

42

18

Tomy

Malcom

20

97

97
Balance
b/d

97

Van Account
Date

Date

2010
Jan

2010
Jan

15

RM
Bank

RM
Balance
c/d

6,500

6,500

6,500

6,500

Balance
b/d

Barclay Account
Date

RM

Date

RM

2010
Jan

2010
Jan
Balance
c/d

2,500

16

Bank

2,000

30

Cash

500

2,500

2,500
Balance
b/d

2,500

Paul Account
Date

Date

2010
Jan

RM

2010
Jan

158

29

24

Sales

158

Trail balance of Small Finishing Retailer as on JAN 2010

RM
Bank

158

158

Parti
cular
s
Cash
account
Bank
account
Purchases
account
Stationery
Tomy
Malco
m

Dr
acco
unt

Cr
acco
unt

9,969
84,790
7,900
89
175
346

Rent
220
Fixtures and
Fittings
Salarie
s
Van
Capita
l

610
790
6,500
105,00
0

Eddy

800

Liew

510

Buttons Ltd

89

Chiefs Bhd
Barcla
y

610
2,500

Sales
Purchases
return

1,783
97

111,389

111,38
9