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Financial Accounting Methods- PDF

Added on - 10 Aug 2021

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Ngày Nộp:10-thg 5-2021 03:07SA (UTC+0700)
ID Bài Nộp:1582000496
Tên Tập tin:accounting.docx (109.63K)
Đếm từ:3873
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1
ADstract
The assignment is intended to use financial accounting methods to verify the financial
parameters of AC&DC Ltd as an accounting assistant. The accounting methods are
mainly used by preparing Journal, Ledger and Trial balance. The results are accurate
financial statements of AC&DC Ltd. Company.
1
1
Explain an accounting cycle
Accounting cycle is the process of processing and recording all financial transactions of
an organization. This cycle is closed into one cycle from transaction taking place, to
generating financial statements, until closing the transaction. This cycle is repeated
every fiscal year as long as the company is still active. And the main task of the financial
accountant is to follow the full accounting cycle from start to finish.
The accounting cycle usually has eight basic steps:
1.Transactions: The process begins with financial transactions. Financial
transactionscanincludeanyassetpurchases,salesormaintenance
expenses, anddebtpaymentsareallfinancialtransactionsthatwillinitiatethe
process.
2.Journal Entries: After the transactions are established. It will be logged into the
company’sjournalentrychronologically.Whenthereareeitherdebitsor
credits, they should always be in balance with each other on the journalentry.
Journal entry is a record of the company’s financial transactions. During a fiscal
year cycle, the journal entry records financial activities chronologically.
3.PostingtotheGeneralLedger:Theentries arethenpostedtoageneral
ledger, where summaries of all transactions for individual accounts can be
seen. The ledger, also known as the end-of-period storage book. Ledger
entries are changes made to each account in your ledger. Using your log,
organize transactions into different accounts. For example, if the customer
pays for the productwithcash, enterthetransactionwiththecashaccountin
yourbooks.
4.Trial Balance: At each end of the accounting cycle (known as a fiscal year), the
total balances are charged to the accounts. These debit or credit accounts must
be equal to produce accurate results. Can use an unadjusted trial balance to
check.Ifthetotalbalanceofalldebitsandcreditsisnotequaltoeachother,
then you have made an error and need to adjust the aboveitems.
5.Adjusting Entries: At the end of the accounting period, there may be unpaid
expensesincurred.Or,maybeyouhavemoreincomebuthaven’treally earned
it yet. At that time, use the adjusting entries to record financial transactions that
have taken place but have not yet beenrecorded.
6.AdjustingTrialBalance:Aftercompletionofadjustingentries,thenextstep
needs to be done is to check debited and credited fit together or not. This step is
called the adjusting trialbalance.
7.FinancialStatement:Aftercompletingtheabovesteps,thenextstepisto
create your statement. Some of the popular financial reportsare:
-Incomestatement
-Accounting balancesheet
-Statements of cashflows
These financial statements are prepared using the correct balances.
8.Closing: After the end of an accounting period, the revenue and expense
accountswillbeclosed.Becauseaccountsforrevenueandexpenses
are
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