Definition of Accounting cycle

Definition

The process of recording and processing the accounting events of a company collectively is known as accounting cycle.This cycle starts when a transaction take place and ends when the transaction include in a financial statement.

Explanation:

Accounting records are maintained through the general ledger and trial balance. Basically it is a method which can applied to check the accuracy of a financial statement. The nature of this method can be uniform and as well as computerized. computerized method helps to reduce the mathematical errors in the accounting process and the uniform method can also helps to reduce mistakes. This cycle is motorized in accounting software that most of the transactions are entered using certain modules such that accounts payable modules for invoices received and the software performs balancing checks.

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