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Explanation & Answer
Attached.
Running head: ACCOUNTING CYCLE
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Accounting Cycle
Institution Affiliation
Date
ACCOUNTING CYCLE
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The steps of the accounting cycle
According to Chari, Kehoe, & McGrattan, (2007), the accounting cycle entails several
steps followed in the accounting which starts with business transactions recording up to the
preparation of the financial transaction. The accounting steps that are followed in the accounting
cycle include, analyzing business transactions as they occur. Ideally, business transactions occur
in different forms. Some occur as cash sales, credit sales, purchases, sales return, purchases
return, the deposit of the cash in the bank, withdrawal of cash from the bank account, and so on.
The second step involves posting all debits and credits on the journal. Recording of the
transactions in the journal entry occurs in chronological order. The transactions in the journal
entry must balance. The third step involves posting the journal entries in the general ledger. In
this step, all ...