Instructions

In this short paper, you will evaluate the importance of the accounting cycle by illustrating the products of that cycle and identifying the potential for problems if it is not properly followed. Use the Module Two Short Paper Template as you work on this short paper.

To complete this assignment, review the Module Two Short Paper Guidelines and Rubricdocument.

ACC 201 Module Two Short Paper Guidelines and Rubric

Overview: In this short paper, you will evaluate the importance of the accounting cycle by illustrating the products of that cycle and identifying the potential for problems if it is not properly followed. There is only one short paper assignment in this course, and it has a unique purpose: You can think of this exercise as establishing the conceptual framework for your remaining work in the problem sets and Final Project I. Essentially, in those activities, you will be engaging in the specific tasks of the accounting cycle and applying detailed processes on a practical level. Therefore, it is important to grasp the larger picture in this short paper so that you will be able to connect these smaller tasks and details and recognize their larger significance.

Prompt: In a well-crafted short paper, respond to the following questions:

 What are the steps of the accounting cycle? Describe each in your own words using specific examples.

 What are the outputs of the accounting cycle? Why are they important? Identify and explain the purpose of each financial statement, including how

they are interrelated.

 Why is the accounting cycle important to a business? Evaluate the significance of the accounting cycle in terms of its practical relevance for businesses.

In your response, be sure to give specific examples of why certain steps are necessary. Address at least three different steps in your evaluation.

Rubric

Guidelines for Submission: Your paper should follow the formatting guidelines in the Module Two Short Paper Template. It should be a 2- to 3-page Microsoft

Word document with double spacing, 12-point Times New Roman font, one-inch margins, and references to the textbook content cited in APA format.

Critical Elements Exemplary (100%) Proficient (85%) Needs Improvement (55%)

Not Evident (0%)

Value

Steps

Meets “Proficient” criteria and demonstrates keen insight into the sequence and interrelationships between the steps of the accounting cycle

Describes each of the steps of the accounting cycle in own words using specific examples

Describes the steps of the accounting cycle, but fails to fully or accurately identify each using own words and specific illustrating examples

Does not describe the steps of the accounting cycle

30

Outputs

Meets “Proficient” criteria and demonstrates nuanced understanding of the products of the accounting cycle

Identifies and explains the purpose of each financial statement created by the accounting cycle, including their interrelationships

Identifies the purpose of each financial statement created by the accounting cycle, but fails to fully or accurately explain each, including their interrelationships

Does not identify the purpose of each of the financial statements created by the accounting cycle

30

Significance

“Meets Proficient” criteria and demonstrates deep appreciations of the significance of the accounting cycle

Evaluates the significance of the accounting cycle for businesses, including at least three specific examples of why certain steps are necessary

Evaluates the significance of the accounting cycle for businesses, but fails to fully or accurately cite specific examples of why certain steps are necessary

Does not evaluate the significance of the accounting cycle for businesses

30

Articulation of Response

Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy-to-read format

Submission has no major errors related to citations, grammar, spelling, syntax, or organization

Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas

Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas

10

Total

100%

Running head: ACC 201 MODULE TWO SHORT PAPER​1

(This entire first page can be deleted after you review the guidelines. Your paper should begin with the title page that follows.)

Review the Module Two Short Paper Guidelines and Rubric document to see how your paper will be scored.

Be sure to follow APA format when providing references. If you have questions on APA formatting, you can check the Purdue OWL website or seek help from the SNHU Writing Lab.

Notes on APA in a Formal Assignment
• Use one-inch margins on all sides.
• Use 12-point Times New Roman font with double spacing.
• Paragraphs should be at least three to four sentences in length.
• Delete the headings for “Introduction” and “Conclusion” in the template. These headings are included below to help you lay out your paper. APA format assumes that the introduction begins the paper, the body continues the paper, and the conclusion wraps up the paper, so those headings are not needed.
• Indent the first line of every paragraph by 0.5”.
• Be careful not to use personal pronouns such as “I.”
• Make sure to delete headings such as Paragraph One, Paragraph Two, and so on.
• Be sure to replace all of the guidelines text in brackets with your own writing.

ACC 201 Module Two Short Paper: The Accounting Cycle

[Your Name]

Southern New Hampshire University

Introduction (delete this heading in your final paper)

[In your opening paragraph, very briefly introduce the purpose of your paper. Recall that you will be discussing the accounting cycle in keeping with the key terms of steps, outputs, and importance, as explained in your rubric instructions. Three or four sentences will be sufficient.]

Paragraph One (delete this heading in your final paper)

[Using your textbook and other provided course resources, identify the steps of the accounting cycle. Provide a description of each step in your own words, using specific examples.]

Paragraph Two (delete this heading in your final paper)

[Identify and describe the major products of the accounting cycle. Why are they important? Explain the purpose of each financial statement, including how they are interrelated. A minimum of five to six sentences is required to support your thoughts. Be specific in your answer and use examples to support your thoughts.]

Paragraph Three (delete this heading in your final paper)

[Defend the importance of the accounting cycle to a business. Specifically, Discuss why specific steps are necessary. Include in your discussion at least three different steps. A minimum of five to six sentences is required to support your thoughts. Focus your thoughts on the role of each step, as discussed in the second paragraph, and what each step contributes to the overall accounting process.]

Conclusion (delete this heading in your final paper)

[The conclusion reminds the reader what your paper is about and allows you to make a final point without introducing new information. Three or four sentences will be sufficient.]

Reference

Warren, C.S., Reeve, J. M., & Duchac, J. (2017). Corporate financial accounting (14th ed.). Boston, MA: Cengage Learning.

[Make sure that you provide appropriate in-text citations in APA style, with the author’s name and year of publication (author last name, year). The textbook citation above is provided as an example of a References page citation, and it should be kept in the references section your paper. Feel free to add other resources. To add credibility to your paper, remember to cite ALL of the sources within the body of the paper, as well as in the References page at the end. References should be in alphabetical order by the author’s last name.] Please it due Friday if possible.

 

 

 

 

 

 

 

 

 

 

 

ACC 201 Module Two Short Paper: The Accounting Cycle

The successful operation and financial performance of a company require effective identification, analyzation, and accurate recording of all financial transactions, which describes the accounting cycle in businesses (Warren, 2017). The purpose paper outlines and describes the 10 steps taken in the accounting cycle from the beginning of any financial transaction in a company through the representation of these transactions on the company financial statements, and finally, developing the outputs. The accounting cycle is vital for companies to ensure accurate entries as well as the financial statements, keeping them up to date and balanced, especially in the identification of the owned funding in a company. Hence, effective and efficient management of corporate finances.

The accounting cycle is a process with sequential procedures undertaken in 10 main steps. The first step involves the analysis and recording of financial transactions, which helps identify how economic events affected the financial position and accounts during that period. Secondly, the transactions are journalized while specifying whether they are a debit or credit. Thirdly, the accounts are transferred to the general ledger for accuracy where they are checked for correctness while preparing the unadjusted trial balance (Carl S. Warren, 2011). Fourth, accounts such as the accrued revenue, accrued expenses, and prepaid expenses are adjusted for the confirmation of matching principles. It is in the fifth step that the adjusted trial balance is prepared to enable adequate preparation of the financial statements such as income statement and the balance sheet in step seven. The journalizing and recording of the closing entries transfer data in the financial statements, which is adjusted by posting the closing trail balance in the eighth step allowing for equity and balances between the credits and debits. This is an essential step as it shows the company’s financial performance and health. Finally, reversing any entries eliminates instances of double counting and verify the balances for the coming year (quarter)

The four primary outputs include the income statement, which provides the net gain and loss for the year, and the retained earnings statement that defines the distribution and equity held among shareholders. The balance sheet which captures and displays the owns (assets) and owned (liabilities), and finally, the stockholder equity statement shows the total equity, common stocks, and retained earnings among the stockholders. They all are important as they define a company’s financial health and performance (Carl S. Warren, 2011). They are interrelated through the net income and equity accounts, which reflect the financial performance and picture.

The accounting cycle is one of the most critical tools in the identification of the financial performance of the company, as if any step is omitted, the final results may provide wrong figures that result in information asymmetries. If the preparation of the unadjusted trial balance was overlooked, there is a higher chance of missing accounts in the adjusted trial balance, which means inaccuracies in accounting (Warren, 2017). Financial statements are all essential as they describe the financial performance and health of the company in that year, without the information, the company would not run effectively or know their gains, growth, and productivity. Moreover, if a company does not post the closing entries, the previous year’s issues may affect the next fiscal year performance due to a lack of correct and accurate information, making these steps trivial in the company.

An accounting cycle is a vital tool in every company and business, and it must be conducted accurately and efficiently to enable companies to identify the financial performance and health in the changing business environment. Through the outputs, companies can develop effective strategies to adapt and adjust accordingly.

 

 

References

Carl S. Warren, J. M. (2011). Financial & Managerial Accounting. Boston: Cengage Learning.

Warren, C. R. (2017). Corporate financial accounting (14th ed.). Boston, MA: Cengage Learning.