Accounting Cycle

The invoice circle is a brassatic carry through used to service of process perform the basic function of account, which is to identify, record, and enunciate information. A business or government activity may possess its own uncomparable way of performing its history rung, quiet down each must perform the delegate in adept way or another. Alv arez clerking Services, a small family operated business, has a very simplified version of the story cycle. The company was established in 1971 and is locate in Flushing, NY.The company is consists of four employees this includes the possessor. star person, the owner, performs the entire write up cycle for the Alvarez Bookkeeping Services. Gradually, the accounting cycle has evolved much worry business have evolved the multiple go have been trim back as engineering science has simplified the process, today, virtually companies use accounting software package that processes many of these timbers concurrently (Averkam p, n. d. , para. 3).The accounting cycle consists of identifying, journalizing, posting, trail fit, change entries, adjusted mental testing proportionality, preparing financial statements, completion, post-closing foot race agreement, reversing entries, and financial statements (Kieso, Weygandt, & Warfield, 2007). Identifying a performance or event is the first step in the cycle businesses engage in miscellaneous activities on a daily, as a result, determining when to record and activity is crucial. formerly the activity is identified a transaction must be recorded, the next step is to journalize the transaction.The journalizing process can be realised in a variety of ways the most common method is the customary journal, although some companies keep other exceptional journals. The next step in the accounting cycle is posting, which is the procedure of transferring journal entries to the record book accounts (Kieso et al. , 2007), so that the transactions reflect in the appropriate ledger accounts balances. After the transactions from the usual journal have passed to the general ledger a trail balance can be performed. The trial balance lists accounts and their balances at a given epoch (Kieso et al., 2007, pg. 74), which is very useful in espial errors that may have occurred during recording or posting. In the event an error is detected or a transaction is missing, an adjusting access is do. Adjusting entries may as well as be do to update an account, such as pay accounts. For instance, a company may have pre-paid insurance on its books as assets, at the end of the period an adjusting entry is do to reflect what is prepaid and what an expense is. much times a trial balance is done after the adjusting entries are made just to be sure everything is still in balance.At this point in the accounting cycle, the financial embraces are typically generated, the most common are the balance sheet, income statement, and carry net income. The accounting cycle concludes with the closing entries and closing trial balances. The expense and revenue accounts are closed against income summary, which is closed against retained earnings thus, preparing the cycle to start again in the coming period. Today, technology is used practically in accounting and has made it easier impact accounting. The way a company processes accounting is changing.Alvarez Bookkeeping Services uses accounting software called Peachtree Quantum has vastly improved the accounting cycle process. The transactions are recorded in the softwares general journal, if the transaction is out of balance the system volition not complete the transaction and spark off to balance the transaction, therefore eliminating the need for trial balances. Once the transaction is recorded the system automatically posts to proper ledger accounts and also carries the information over to financial statements.If the owner wishes to review how the company is doing, he would stom ach a financial report by selecting the report and forms option selecting the specific report they would like run. Adjusting entries are still necessary, notwithstanding the accounting cycle has been effectively reduced to identifying, journalizing, adjusted entries, financial statements, and closing. The accounting cycle is proven methodical system is expert in performing accounting tasks at Alvarez Bookkeeping Service.The role of people and systems in the cycle has changed the way companies perform the accounting cycle some companies have departments stipulate for specific tasks of the cycle, whereas Alvarez Bookkeeping Services has one individual who does the entire process. Nonetheless, companies have benefited from the advancements in technology and most notably in accounting systems. Accounting systems have expedited the process and given more accurate results, which chuck up the sponge the user to focus on analyzing the information.