Accounting Cycle
The Accounting Cycle refers to the sequence of events and activities in financial accounting used by businesses to record, classify, analyze, and summarize their economic transactions over time. It is an ongoing process that begins with identifying and recording transactions, progresses through adjustments and adjusting entries, culminating in the preparation of financial statements and closing entries. The Accounting Cycle reflects the application of accounting principles and concepts to ensure accurate and transparent representation of a business's financial position and performance. It serves as a fundamental framework for financial reporting and decision-making, providing essential information to stakeholders such as investors, creditors, and regulatory bodies.
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