Accounting Cycle

The name given to the collective process of recording and processing the accounting events of a company. The series of steps begin when a transaction occurs and end with its inclusion in the financial statements. The nine steps of the accounting cycle are:
  1. Collecting and analyzing data from transactions and events.
  2. Putting transactions into the general journal.
  3. Posting entries to the general ledger.
  4. Preparing an unadjusted trial balance.
  5. Adjusting entries appropriately.
  6. Preparing an adjusted trial balance.
  7. Organizing the accounts into the financial statements.
  8. Closing the books.
  9. Preparing a post-closing trial balance to check the accounts.
Also known as “bookkeeping cycle”.

The accounting cycle is a methodical set of rules to ensure the accuracy and conformity of financial statements. Computerized accounting systems have helped to greatly reduce mathematical errors in the accounting process, but the uniform process of the accounting cycle also helps reduce mistakes.


Investment dictionary. . 2012.

Look at other dictionaries:

  • accounting cycle — The sequence of steps in accounting for a financial transaction entered into by an organization. First, it is recorded in the books of account and finally it will be aggregated with other transactions in the financial statements for a financial… …   Accounting dictionary

  • accounting cycle — Fin the regular process of formally updating a firm’s financial position by recording, analyzing, and reporting its transactions during the accounting period …   The ultimate business dictionary

  • the accounting cycle — UK US noun [S] ACCOUNTING ► the series of processes involved in recording a financial event, beginning at the time money is spent or received and ending at the time it becomes part of the financial report: »The accounting cycle begins with… …   Financial and business terms

  • Учетный цикл (ACCOUNTING CYCLE)  — Последовательность этапов или процедур в процессе ведения учета, активизируемая на основании фактов хозяйственной деятельности и завершаемая по окончании каждого отчетного периода. Начинается с анализа хозяйственной операции и заканчивается… …   Словарь терминов по управленческому учету

  • cycle — cy‧cle [ˈsaɪkl] noun [countable] a series of events that happen in an order that regularly repeats itself: • Approved Training Practices are monitored by the Association on a five year cycle. ˈbilling ˌcycle ACCOUNTING the usual time that is… …   Financial and business terms

  • Accounting (UIL) — Accounting is one of several academic events sanctioned by the University Interscholastic League. The contest began in the 1986 87 scholastic year.Accounting is designed to test students understanding of general accounting principles and… …   Wikipedia

  • cycle time — The length of time required from the placing of an order by a customer to the delivery of the product or service. In companies using just in time techniques, this should be equivalent to the time taken from start to finish of the manufacturing… …   Accounting dictionary

  • Accounting information system — An accounting information system (AIS) is the system of records a business keeps to maintain its accounting system. This includes the purchase, sales, and other financial processes of the business. The purpose of an AIS is to accumulate data and… …   Wikipedia

  • cycle counting — cycle count UK US noun [C] ► ACCOUNTING, PRODUCTION, COMMERCE the process of counting a small chosen set of goods and materials owned by a company or available for sale in a store, etc. on each business day rather than having one time of the year …   Financial and business terms

  • cycle count — UK US noun [C] ► ACCOUNTING, PRODUCTION, COMMERCE the process of counting a small chosen set of goods and materials owned by a company or available for sale in a store, etc. on each business day rather than having one time of the year, etc. when… …   Financial and business terms

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.