Importance of Accounting Cycle
Here we discuss about the Importance of Accounting Cycle. If you want to know better understand this topic, then kindly read my article about “Steps in the Accounting Cycle". Through this Cycle, true and fair of financial statements can be presented to the Users of Financial Statements (Investors, Banks, customers, Financial Institutions, Creditors, Suppliers and so on).
4 main Importance
ü Company Businesses can easily check their
performance through Income Statement or Statement of Comprehensive Income,
Balance Sheet, Statement of Cash Flows and Statement of Changes in Equity.
Ultimately, the weaknesses of company businesses can be lowered in this regard.
ü Due to this cycle, Computerized Accounting is
possible through Accounting Software, like QuickBooks (Affiliate Link), Peachtree, Tally, Oracle
and so on. Because there is Proper Management of Recording transactions.
ü It is called the lifeblood because if any one
step of them will fail the whole accounting processes will fail and does not
show true and fair view of Financial Statements.
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