StudyCorgi Business
Print Сite this

The Importance of the Accounting Cycle

Topic: Accountancy Words: 291 Pages: 1

Introduction

The accounting cycle consists of collecting, registering, analyzing, and transmitting financial data for further decision-making. Accounting is an organized system of collecting and summarizing information by an accountant. Thanks to the systematization of accounting data, it is possible to develop effective plans and strategies to increase the efficiency and profitability of the enterprise. In general, accounting means the documented observation and control of the financial activities of an enterprise or organization and the appropriate coverage of this information for the implementation of different decisions.

Discussion

Since the accounting cycle is a sequence of specific actions, it is important to distinguish its stages. Thus, the first stage is data analysis, followed by the recording of transactions and posting. After that, the accountant prepares a trial balance and changes based on it, which can happen several times. When the balance sheet is ready, it is necessary to provide financial statements and make final entries (Hasanah, Rasyiqah, Mawaddah, & Muda, 2022). Based on this, the goal of accounting is an economic analysis of the essence of the enterprise’s work, aimed at forming a database for making certain decisions. The above actions make it possible to prevent negative results in business or economic activity and ensure financial stability.

Conclusion

So, the accounting cycle is a sequence of steps related to the systematization of financial information. Its importance lies in meeting the informational needs of enterprise management and the possibility of strategic development. The main goal of accounting is control over the availability and movement of material resources and the formation of a reasonable system of indicators. The success of the accounting cycle is ensured if the executors of the accounting process are competent and aware of the importance of directions for using systematized information.

Reference

Hasanah, U., Rasyiqah, S. Z., Mawaddah, W., & Muda, I. (2022). The steps in the accounting cycle and how to prepare correcting entries. Journal of Positive School Psychology, 6(3), 2388-2394. Web.

Cite this paper

Select style

Reference

StudyCorgi. (2024, January 29). The Importance of the Accounting Cycle. https://studycorgi.com/the-importance-of-the-accounting-cycle/

Work Cited

"The Importance of the Accounting Cycle." StudyCorgi, 29 Jan. 2024, studycorgi.com/the-importance-of-the-accounting-cycle/.

* Hyperlink the URL after pasting it to your document

References

StudyCorgi. (2024) 'The Importance of the Accounting Cycle'. 29 January.

1. StudyCorgi. "The Importance of the Accounting Cycle." January 29, 2024. https://studycorgi.com/the-importance-of-the-accounting-cycle/.


Bibliography


StudyCorgi. "The Importance of the Accounting Cycle." January 29, 2024. https://studycorgi.com/the-importance-of-the-accounting-cycle/.

References

StudyCorgi. 2024. "The Importance of the Accounting Cycle." January 29, 2024. https://studycorgi.com/the-importance-of-the-accounting-cycle/.

Powered by StudyCorgi's free citation creator.
Copy to clipboard
More Essays in Business

This paper, “The Importance of the Accounting Cycle”, was written and voluntary submitted to our free essay database by a straight-A student. Please ensure you properly reference the paper if you're using it to write your assignment.

Before publication, the StudyCorgi editorial team proofread and checked the paper to make sure it meets the highest standards in terms of grammar, punctuation, style, fact accuracy, copyright issues, and inclusive language. Last updated: .

If you are the author of this paper and no longer wish to have it published on StudyCorgi, request the removal. Please use the “Donate your paper” form to submit an essay.