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Accounting Cycle

   Accounting cycle is a completed sequence of accounting process starts with recording of business transactions in Journals and subsidiary Books and ends with preparation of final accounts.
     In accounting cycle, Journal and subsidiary books are prepared to record the business transactions. After recording them in Journal and subsidiary books, entries (transactions) are classified and posted to ledger accounts. As final stage, Final accounts i.e. Trial balance, profit and loss A/c, Balance sheet are prepared by summerising all ledger accounts to show the results and financial position of business. Once the completed sequence of accounts are completed, accounting process starts again by recording the business transaction in Journals and subsidiary books.
                                                               

    These three processes are done consequently at once in an accounting period. Processes are done at the three stages one stage by another is called an accounting cycle. Recording, Classifying, Summerising are the three stages of an accounting cycle. Otherwise recording in Journal, posting to ledger, preparing final accounts are the three stages of an accounting cycle.

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