Accounting Cycle Flashcards
1
Q
Accounting periods
A
Artificial time periods of equal length so that the users of the accounting statements can make meaningful comparisons of operating results of the current period with those of earlier periods
2
Q
The accounting cycle
A
The accounting cycle is the process of identification and gathering preparing and record analysing and reporting the activities of the business during the accounting period so that business and other decisions can be made
3
Q
What are the steps for the accounting cycle
A
Collect
- cheque book
- deposit books
- direct from bank statement
Record: bank statements
- cash book
- journal sheets
- accounting software package
Classify and store
- ledger accounts
Summarise report
- trial balance all documents above
Interpreting
- profitability
- financial stability
- solvency
- managerial efficiency
