Introduction In your opening paragraph, very briefly introduce the purpose of yo

Question

Introduction

In your opening paragraph, very briefly introduce the purpose of your paper. Recall that you will be discussing the accounting cycle in keeping with the key terms of steps, role, omission, and finally financial statements, as explained in your rubric instructions. Three or four sentences are sufficient.

Paragraph One

Using content from your accounting cycle workbook submitted in Final Project Part I and from your readings in Chapter 4 of the textbook, identify the steps of the accounting cycle. Provide a description of each step. Also, discuss what role each step plays in the success of a business.

Paragraph Two

Describe how the omission of a step could impact the success of a business. What strategies could be used to avoid this? Include in your discussion the omission of at least three different steps. A minimum of five to six sentences is required to support your thoughts. Focus your thinking around the role of each step, as discussed in the previous paragraph, and how its omission will impact the success of a business.

Paragraph Three

Identify and describe the major financial statements that come out of the accounting cycle. Why are they important? A minimum of five to six sentences is required to support your thoughts. Be specific in your answer and use examples to support your thoughts.

Conclusion

The conclusion reminds the reader what your paper is about and allows you to make a final point without introducing new information. Three or four sentences are sufficient.

Explanation / Answer

Steps of accounting cycle: 1) Analysing all the transactions happened in business over specified period, here it is important to note that not all transactions that happen in business are of financial term, like receiving a sample of product from various suppliers 2) After analyzing the transactions, next step in the cycle is Jounalizing them, here it is important to note that every financial business transaction will have two aspects Debit and Credit, Debit must be equal to credit, 3) Ledgering, preparing ledger, with the help of jourmals, we prepare ledgers for each accounts which will have history of the transactions with the ending balance, 4) trial Balance - through the ledger accounts we prepare trial balance 5) Adjustment entries, some time some errors happen, ommission happens, then we correct them through passing adjusting entries and after that prepare adjusting trial balance, 6) through the help of trial balance we prepare income statement and balance sheet and cash flow statement.

Ommissions of any of the above discussed accounting steps in accounting cycle will have huge impact and concern over financial health of the firm, if you forget to journalise a cash sales transactions then it will have an impact on cash account and stock account., if you forget to post a ledger for a cash sales, then again it will have an impact on the closing balance of stcok and cash, now suppose if you forget to include a purchase from the Trial balance then it will again have an issue on stock and cash position of the firm.

The majar financial statements are income statements, balance sheets and cash flow statements, income statements tells the user of it and stake holder of the firm that what were the direct and indirect costs incurred in order to earn the profit, balance sheet tells that assets position as compared with liabilities while the cash flow statement tells that how effectively the cash has been generated in the business and its application in the business.

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