BUSINESS TRANSACTIONS & THEIR

ANALYSIS
Financial Accounting and Reporting (ACCTG131)
STEPS IN THE ACCOUNTING CYCLE
1. Identifying and analyzing
2. Journalizing
3. Posting
4. Unadjusted trial balance
5. Adjusting entries
6. Adjusted trial balance (and/or Worksheet)
7. Financial statements
8. Closing entries
9. Post-closing trial balance
10. Reversing entries

IDENTIFYING & ANALYZING TRANSACTION

AND EVENTS
Only accountable events are recorded.

ACCOUNTABLE EVENTS
 are those that affect the assets, liabilities,
equity, income or expenses of the
business.
 are normally identified from source
documents, such as sales invoice, official
receipts, delivery receipts, and the like.

TYPES OF EVENTS
a) External events are transactions that
involve the business and
another external party.
b) Internal events are events that do not
involve an external party.

JOURNALIZING
 refers to recording an identified accountable
event in the journal by means of a journal
entry.

SIMPLE & COMPOUND JOURNAL ENTRIES

a) Simple contains a single debit and
journal entry a single credit element.
b) Compound contains two or more debits
journal entry or credits.