2

Recording Business Transactions

2.1 The Accounting Cycle

2.2 Timing

2.3 Analyzing Transactions

2.4 Recording in Journals

2.5 Posting to the General Ledger

2.6 Generating Financial Statements

2.1 The Accounting Cycle

In this subchapter, we explain the accounting cycle, or how transactions are recorded, summarized, and translated into useful financial information. Understanding the accounting cycle is essential to knowing how financial transactions are converted into hard data about a company.

The accounting cycle is the series of events from the execution of a transaction to its ultimate reflection in the financial statements.

A transaction ...

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