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Accounting Cycles
Every business utilizes accounting cycles to record transactions and prepare financial
statements. There are eight basic steps in which an enterprise will use in order to create its
financial statements: "(1) identifying and measuring transactions and other events; (2)
journalizing; (3) posting; (4) preparing an unadjusted trial balance; (5) making adjusting
entries; (6) preparing an adjusted trial balance; (7) preparing financial statements; and (8)
closing." (Kieso, Weygandt, & Warfield, 2007, p. 93) It is important for any company to
follow each of these steps appropriately in accordance with GAAP guidelines. In this paper
I will be explaining the overall accounting process and describe the people, processes, and
systems that are integral to this process.
Transactions.
"The first step in the accounting cycle is analysis of transactions and selected other
events." (Kieso, Weygandt, & Warfield, 2007, p. 68) Some of the transactions and selected
other events in which Tiffany and Company would report on their financial reports are not
limited to jewelry and services; sterling silver flatware; picture frames and other decorative
items. The FASB coined the phrase "transactions and other events and circumstances that
affect a business enterprise" as a description of the foundation in which it will use to
illustrate changes that occur within a company that affect its assets, liabilities, and equity.
There are two types of events that can affect a companys assets, liabilities, and equity:
external events (i.e. transactions), interaction among an entityand another party; and
internal events, changes that occur within production processes. All in all a corporation
