Application 2: Concept Map of the Accounting Cycle - Essay Example

CONCEPT MAP OF THE ACCOUNTING CYCLE Throughout the accounting cycle formulation, from the first step to the step where correction of errors is conducted, a series of procedures are performed. To enhance workplace performance several mathematical operations are performed and this entails application of processes and strategies that occur in personal and business situations. The cycle entails the basic accounting equation components of assets and liabilities on one side and owner’s equity on the other side.

To an extension, the components extend to aid in the calculation of net income and profits. Concisely, the accounting process as shown in the diagram above entails several activities right from when a transaction takes place to when errors are corrected and accounting books balanced. The balances are forthwith transferred in the reporting books at year-ends (Chari, Kehoe & McGrattan, 2004). ReferencesChari, V. V., Kehoe, P. J., & McGrattan, E. R. (2004). Business cycle accounting. Cambridge, Mass.

: National Bureau of Economic Research.