Regnskapskretsløpet

Regnskapskretsløpet describes the cyclical process of financial recording and reporting within a business. It begins with initial transactions, such as sales or purchases, which are then documented in journals. From the journals, these transactions are transferred to the general ledger, which categorizes them by account. At the end of a reporting period, a trial balance is prepared to ensure that the debits and credits are equal. Adjusting entries are then made to account for accruals and deferrals. A new trial balance is created after these adjustments. The financial statements, including the income statement, balance sheet, and cash flow statement, are then generated from the adjusted trial balance. Finally, closing entries are made to reset temporary accounts to zero, preparing the ledger for the next accounting period. This continuous loop ensures that financial information is consistently tracked, organized, and reported.