The Cycles Of The Accounting Cycle

Abstract

Early in the first course in financial accounting, students learn the accounting cycle.  The accounting cycle is very simple.  It is just a list of the basic actions of accountants that lead to the financial statements.  However, students beginning the study of accounting seem to find it difficult to understand and remember.  I believe the difficulty stems from the way is which the accounting cycle is presented in accounting texts.  In this paper, I reviewed principles of accounting and financial accounting texts and some intermediate accounting texts to summarize the way the accounting cycle is currently presented.  I then proposed a method of teaching the accounting cycle that focuses on the substance of the steps, not just their form. I further proposed that this method be used as a framework to teach many of the subjects in financial accounting.  Lastly, I surveyed accounting students regarding the presentation of the accounting cycle.  The results have been very favorable.