Accounting Cycle Acc/421

Accounting Cycle Paper

The accounting cycle can be defined as a series of steps that record all a business' transactions over a period of time at the end of that business cycle. In most jobs there is a practice daily of an accounting cycle, and within my volunteer job there are many different aspects of their cycle. Within a church organization there are extra ledger accounts to account for besides purchasing supplies, writing checks, payroll, and paying invoices.

There are several steps to an accounting cycle. However I help my church out each quarter and churches are non-for-profit organizations. They follow the same guidelines but have a few extra steps. The first is the gathering of all the source documents such as cash slips, checks, bank deposit slips, and internet payment confirmations identifying the sum of all transactions. The second step is to journalize the transactions of the business and post the debits and credits to the appropriate journals. Next is the posting of the transactions to the appropriate account ledgers, and perform an unadjusted trial balance to check for accuracy. Then the adjusting entries can be made before the accounting period comes to a close, and balance the ledgers. The next step is an adjusted trial balance, and then to prepare the financial statements. The final step is to close out the ledger accounts.

At my church, I assist them with the financials part time. Accounting for a non-for-profit organization is a little different than that of a for profit business. Currently there are church bills, invoices, donations, and receipts that come through the office. The treasurer then picks them up from church every Monday and sorts through them. The Pastor has to sign off on all invoices to get paid for any work that has been done for the church. He reviews each of the invoices for verification of match of the vendor name, and remit to address are correct. The church has two different kinds of invoices for reviewing. The first invoice is from the church purchasing products, and the other invoice type is the church purchasing services. Then I enter them into a journal and post them to the appropriate account ledgers. Once everything is matched up each invoice can be paid. Within a church, there are many ledgers to consider because there are bills due by the church, but then we also have donations and fundraisers along with other collections for the things such as St. Vincent DePaul Society, Catholic Charities, or even to help the school tuition. The church manager then performs an unadjusted trial balance to check for accuracy in the ledger entries. The next step is to perform any adjusting entries to correct any errors before the accounting period comes to an end, and also balance the ledger accounts. The final step is the church manager performing an adjusted trial balance, creating financial statements for Father to review, and then