Accounting Cyle: What is it?
A process of recording transactions of a company.
Eight Steps to this Process
Step 1: Analyze the Transaction
Source Document-- An original record containing the details used to post in a general ledger.
Examples include: Memorandum, Receipts, Sales Invoices, Checks, Calculator Tapes.
Step 2: Journalizing
Journalizing-- the act of recording transactions into a journal.
Process--
A. Write the date in the Date Column.
B. Write the title of the account debited. Then, write on one column just below as a credit.
C. Write the debited and credited amounts of that transaction.
D. Write the source document number in the Doc. No. column for both debited and credited accounts.
Step 3: Posting
From a General Journal to a General Ledger
1. Write the date in the date column.
2 Write the journal page number (Ex.- G1) in the Post Red. of the account.
3. Copy the accounts, and post the accounts in their designated ledger account.
(3.If cash is debited, post the cash into the ledger as a debit, and place on the balance column as a credit. Vice versa with credit accounts.)
4. Calculate the new balance in the ledger.
5. Record the account number, in the Post Ref. column of the journal.