The concept and pillars of the accounting cycle

 The concept and pillars of the accounting cycle

 The accounting cycle begins with the document, as the document is what proves the occurrence of economic events in any establishment, then the registration in the journal entry, then the transfer to the ledger, then the trial balance before the adjustments, then to the trial balance after the adjustments.

After that, the balance sheet or financial position is made by transferring the trial balance balances after adjustments to this list, where the trial balance expresses the final balance of each account from the balance sheet and income statement.

Pillars of the accounting cycle

1_ Document

2 _ Recording the accounting operations in the journal entry (double entry)

3- Posting to the ledger, which is an account statement for every account in the facility.

4_ Tab, summarize, and put entries in the books to access them when needed.

4 _ Trial balance before adjustments

5 _ Inventory adjustments

6 _ Trial balance after adjustments

7_ Create financial statements, which are the list of financial position, income statement, cash flows, and change in property rights.

And the accounting cycle is usually a year, that is, an accounting period, and it is one where the journal entry is recorded, my history is recorded, and then the posting to the tab books, i.e. the tabular registration, to the ledger's books, or the final registration.

Closing entries are made for the elements of the income statement at the end of the year, revenues and expenditures, to determine the outcome of the business of the establishment in terms of profit or loss.

Therefore, the aim of the accounting cycle is to know the financial position of the establishment and the outcome of the business of the establishment’s activity, to know the net cash flows, that is, cash entering and leaving during the accounting period, and to record all economic operations of the establishment. It is also a means of controlling the financial and economic operations in the establishment, especially the cash.