Accounting Cycle in Microsoft Dynamics AX 2012

As we know that organization operations such as purchases, sales should be recorded as transactions that credits/debits amounts from one accounts to others. The motto is to learn all the steps from the business operation till the financial statement. This flow is called the accounting cycle. These are the core responsibilities of an accountant person.

It can also be defined as the accounting cycle is the sequence of procedures used to keep track of what has happened in the business and to report the financial effect of those things. 

These are the things which occurs in accounting cycle:

1. Operations: Purchases/Sales occurs in  business.

2. Computerize/Record the purchase/sales: It is necessary to keep track of all things, so that accounting Dept has a record of all the information about sales and purchases that occurs in business.

3. Analyse: The most important step is to analyse the things.The goal is to write correct transactions.We need to analyse things such as “What happened?” , “What accounts will change?”(Asset, Liability, Owner’s Equity) , “How will they change?” (Will the accounts increase or decrease?) , "Debit or Credit?" (Debit is “good” for the company, Credit is “bad” for the company.).

4. Journalize: The main journal for an accountant is the General Journal. General Journal is used to write transactions to it.Accountant hold this responsibility.

5.Post: We need to post the transactions, because amounts are transferred from one account to another.

6.Trial Balance: A trail balance is a list of all accounts and their balances.checks the accounting equation: Assets = Liabilities + Owner’s Equity.

7.Adjustments: Adjustments are nothing but changes in any purchases or orders made or you can say that they are entries are made at the end of a period to track revenue and expenses.

8.Financial Statements: They are the Balance Sheet, Income Statement, and Cash Flow Statement.

9.Close: The accountant closes the transactions.The reason for the closing entries is to ensure that each revenue and expense account will begin the next accounting year with a zero balance.