Project 1
1. Project 1
Project 1: The Accounting Cycle
Project Introduction
fiscal period: the period of time over which earnings are measured
accounting cycle: the steps of accounting activities that are followed during each fiscal period
Accounting activities repeated in each fiscal period are referred to as the accounting cycle. A fiscal period is the period of time over which earnings are measured.
As in FIN1015, you will see the GAAP icon throughout this course. Do you know which GAAP principle is being referred to here? Check out GAAP below to see if you are correct.
6. The Time Period Concept
The Time Period Concept says that accounting takes place over specific time periods known as fiscal periods. These fiscal periods are of equal length and are used when measuring the financial progress of a business.
In FIN1015 you prepared the beginning balance sheet, set up a chart of accounts, and opened these accounts in the ledger for a new company. Now that the business is set up, you are ready to begin the day-to-day activities of the business and this accounting cycle.
To walk you through this, Sakineh, the Financial Trainer, is ready to guide you through six training rooms that will prepare you for the final project, where you will work as an entry-level accounting clerk and showcase your knowledge in a portfolio presentation. The six training rooms are as follows:
- Training Room 1 will explain what source documents are and why they are important.
- Training Room 2 will show you how to analyze the day-to-day business transactions.
- Training Room 3 will show you how to analyze temporary capital accounts.
- Training Room 4 will show you how to enter these transactions into a journal.
- Training Room 5 will focus on petty cash and how journalize petty-cash transactions.
- Training Room 6 will show you how to post this information to the general ledger and verify your amounts in a trial balance.
Continue to Training Room 1, where Sakineh will explain the importance of source documents—the first papers a business receives.
Want a sneak peak at the full accounting cycle first? Check out the Interactive Accounting Cycle. Click on each step for a description of the step. FIN1020: Accounting Cycle 1 will address the first four steps only. You'll have to wait for FIN1030: Accounting Cycle 2 to learn about the last four steps.