Kế toán, kiểm toán - Accounting transaction cycles

Accounting transaction cyclesLearning objectivesTo understand the cycle of basic business activities and know its components.To learn what a transaction cycle is and how many transaction cycles there are. To learn to match an economic activity with a transaction cycle.To know the advantages of using transaction cycles.To understand how the accounting information system works.key termsconversion cycleexpenditure cyclefinancial cycleorganisational structurepayroll cyclerevenue cycletransaction cyclesThe structure of an organisationOrganisations can be subdivided into divisions and departments based on the activities carried out by each group. This is the organisational structure.Business activitiesAccounting information systems must capture all the economic events or business activities of an organisation. For example:capital investmentpurchasesproductionsalesTransaction cyclesA set of transactions that occur in a related sequence is a transaction cycle Transactions can be divided into a number of groups. For example:financial cycleexpenditure cyclepayroll cycleconversion cyclerevenue cycleTransaction cyclesFinancial cycle:consists of those accounting transactions that relate to obtaining capital from owners and lenderscovers the acquisition and use of capital assetsExpenditure cycle:mainly consists of the transactions relating to the acquisition of raw materials for production and goods for resaleTransaction cyclesPayroll cycle:consists of transactions involved in the payment of salaries and wages to employees of the organisationConversion cycle:contains those transactions involved in converting the raw materials into finished products by the application of labour and overheadsRevenue cycle:contains accounting transactions that involve the generation of revenue from the outputs of the conversion process