An accounting cycle is a entire progression of accounting procedure, that begins with the recording of trade transactions and ends with the preparation of concluding accounts. So, accounting cycle is a step-by-step procedure of recording, categorization and summarization of financial transactions of a business.
It generates helpful financial information in the form of financial statements including income statement, balance sheet, cash flow statement and statement of changes in equity. To confirm the correctness of the work done, these balances are transferred to a statement called trial balance. Preparation of trading and profit and loss account is the after that step. The balancing of profit and loss account gives the net result of the business transactions. To know the financial position of the business concern balance sheet is prepared at the end.
