Supervisory Question:
Can you explain how the finance and accounting cycle works?
Answer:
The accounting cycle takes accountants through ten distinct steps, each of which depends on information generated in the previous step. The accounting cycle is continually repeated, with the final results of each iteration resulting in a comprehensive set of financial statements. Small business accountants should have a thorough understanding of the accounting cycle, including how each step in the cycle affects the next, before taking on responsibility for an accounting system.
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