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.