ACCOUNTING CYCLE – is the collective process of identifying,

analyzing, and recording the accounting events of a company. The series of steps

begins when a transaction occurs and end with its inclusion in the financial statements.

Steps in the accounting cycle.  

1
Analyzing the business documents.
2
Journalizing transactions.
3
Posting journal entries to the ledger.
4
Balancing the accounts and preparing trial balance.
5
Journalizing and posting adjusting entries.
6
Preparing financial statements.
7
Preparing a post-closing trial balance.
8
Journalizing and posting closing entries.
9
Journalizing and posting reversing entries.

BUSINESS DOCUMENTS

SALES INVOICE. A document which gives evidence to a transaction involving the sale of
merchandise.  It gives information as to the name and address of the customer, a
description of the merchandise sold, the total amount of sales and terms of payment.

STATEMENT OF ACCOUNT -  A document requesting payment of an account for services rendered

or for goods sold.

OFFICIAL RECEIPT -. A document which gives evidence to a transaction involving receipt of cash. 
It gives information as to the amount of cash received, the person from whom cash was
received, the date of receipt and the nature of the transaction giving rise to the cash receipt.

DELIVERY RECEIPT- A document which gives evidence to the delivery of supplies or property
assets.  It gives information as to the quantity and description of the items delivered, the total
amount of the delivery, the person who received the items, the date of the delivery and the
name of the supplier.
 VOUCHER -. A document which gives evidence to a transaction involving approval of payment of
cash.  It gives information as to the name and address of the payee, the amount of payment, the
date of payment, an explanation for such payment and the journal entry to record the payment.

PROMISSORY NOTE -  A written promise made by a maker promising to pay the payee a certain
amount in the future.

CHECK-A document which gives evidence to withdrawal  of cash in a checking account.

PURCHASE ORDER -.  A document which requests purchase of supplies or property assets. It gives
information as to the quantity and description of the requested items, estimated cost of the
order, suggested suppliers and the name of the requesting party.

CREDIT MEMORANDUM -.  Whenever the buyer finds an error in an  invoice, or when merchandise
is damaged, he should notify the seller at once.  The seller send the buyer this business
document if the latter’s claim is valid.

BANK  DEPOSIT SLIP-.This document is accomplished every time the business deposits money in
the bank.