Sample Essay
The accounting cycle consists of three to four steps are executed in sequence. The first task accomplished by the accounting department of any organization is posting journal entries. How can you define a journal entry? The record of any transaction in the accounting book is called journal entry. Whenever a transaction is completed, it affects two accounts at a time. One of these accounts is a debit account while the other is a credit account. The debit accounts have their balances on the left side while the credit accounts have their balances on the right side. After the completion of all the transactions, both columns should be equal and carry the same figure.
Journal entries are posted after one month, six months or one year. This depends on the preferred practice and size of the organization. Large companies execute thousands of transactions at the end of each month so their books are completed on monthly basis. At the end of each month the balances are checked so that the errors can be rectified.
The accounting department of a company consists of multiple personnel. Posting journal entries is the first step of the accounting cycle. Hence, everything is not left on one person. Once all the transactions are complete and the balances are equal, the accountants initiate the next step of the cycle.
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