Arrange the Financial Statements in Accordance
In preparing financial statements, you need to fill in several explanations such as profit and loss statements, changes in capital, and also the balance sheet. At this stage in the preparation of the financial statements, you must move account information on the adjusted trial balance to the financial statements. The recording must also be adjusted to the format of the financial statements.
In explaining the balance sheet, you must fill in the financial position of the business or company. Starting from assets, debt, to capital in the accounting cycle period you need to record in detail and in full. The preparation of a balance sheet is also quite simple because you only need to write the balance sheet data and do the preparation on the balance sheet in accordance with the existing part of the balance sheet.
For the profit and loss statement, you write down the calculation of the company’s income and expenses or expenses. You must record and count all the company’s money coming in and deduct it from the expense burden in the process of earning income. In other words, you must reduce the income received by the cost of capital spent so that the income can be obtained.
Whereas for reports on changes in capital, it must present changes in the location of the capital in your company or business. Changes in the capital can occur because there is an increase in capital or prive, namely a reduction in investment from business or corporate capital holders.
Furthermore, you can add the results of changes in the capital with profit and loss on the profit and loss statement. That way, you can find out the nominal capital of the company in the accounting period.
The last two points on the financial statements are cash flow statements and financial statement notes. For cash flow statements, you can present the company’s cash inflows and outflows. You can write the cash flow based on investment, funding, and operational activities in one accounting cycle period.
Financial statement records contain additional information that is more detailed than a particular account. The purpose of these financial statement records is to make the comprehensive value of financial statements of a business or company easier to understand.
So, if there are things that are not easy to understand, you can provide an explanation in the notes to the financial statements.
Create and post closing journals in the ledger
The making of this journal relates to the closure of information of all accounts with a statement of profit, loss and also a report on changes in capital. The purpose of keeping a closing journal is to avoid the risk of recalculation of the accounting cycle in the next period. That way, the closing journal ends the account of changes in capital, income, and expenses.
Making a Post-Closing Trial Balance
The purpose of making this closing trial balance is for account information to be balanced. That way, accounting activities in the next cycle can be started without any mistakes that might be fatal. The preparation of the closing trial balance is done by recording accounts that still have a post balance value after making a closing journal.
Making and Bookkeeping Turning Journal in the Big Book
The making and accounting stage of the reversing journal in the general ledger is the last step in preparing the accounting cycle report and is generally done when starting a new accounting cycle period. You can also decide not to prepare a reversing journal if you feel it is not needed in the accounting cycle report for a certain period.
The purpose of making a reversing journal is to simplify the way the transaction is recorded. Usually, a reversing journal needs to be made if there are repetitive transaction records for the next accounting period. This is what causes the creation and accounting of reversing journals to be optional.
Accounting Cycle Reports Make Company Activities More Effective
By having an accounting cycle report, you can find out your company’s financial flow. Both the trading company accounting cycle, the service company accounting cycle, until the manufacturing company accounting cycle.
This is what makes the accounting cycle report needs to be done by the owner of the company or a business person.
Decision making on business or company performance also becomes more appropriate by looking at the accounting cycle report. Therefore, so that the company or business that you manage can develop better, do not hesitate to prepare an accounting cycle report.