Accounting cycle is a series of activities that that shows the entire process a transaction goes through from start to end. These processes are repeated in each accounting period. The paper discusses the accounting cycle of the office of the chief financial officer. The cycle follows some common steps.
The first step is identification of the transaction and the events which surround the transaction. The second step focuses on the putting together source documents of the transaction. The third step entails examining and putting the transactions into classes. This step entails ascertaining the monetary value of the transactions and identifying the accounts where the transaction will be posted.
At this stage, the persons involved also identify whether to pass a credit or debit entry on the accounts affected. The fourth step involves recording the transactions into journals. These journals depend on the nature of the transactions. The fifth step entails sorting out the entries in the general journal.
Once sorted, the entries are posted to various ledger accounts. It is important to point out that these first five steps occur repeatedly throughout the accounting cycle that is from start to the end of the accounting cycle. The subsequent steps occur at the end of the financial year. The sixth step entails preparation of the trial balance.
The trial balance shows a summary of ledger accounts maintained in an accounting period. It shows the debit and credit balances from the ledger accounts. The trial balance has no significant accounting meaning. It only helps in identifying errors while posting transactions because, in the presence of errors, the debit and credit balances will not be in agreement.
The seventh step entails correcting the errors in the trial balance. The corrections can only be executed if the credit and debit balance are not tallied. The errors can be caused by wrong posting of transactions or omission during posting of transactions (Hunt, Kieso, Weygandt & Warfield, 2010).
The eighth step entails coming up with adjusting entries to correct the errors in the trial balance. The ninth step entails passing the correcting entries in the ledger accounts. The tenth step entails coming up with a trial balance that reflect the adjustments made. This step is similar to the sixth step.
The accountant must ensure that the trial balance is in balance. This should be done severally until the trial balance is in balance. The eleventh step entails preparing the financial statements these are, statement of financial position, income statement, statement of retained earnings, and cash flow statement. The twelfth step entails coming up with closing journal entries to close up the temporary accounts.
The thirteenth step entails passing the closing entries to the ledger accounts. After passing the journal entries, the fourteenth step will entail trial balance to ensure that the debit and credit entries are in balance. The final step involves preparing reversal journal entries.
This stage is option though it helps an accountant to ensure that there is no double accounting of corrective entries done when preparing the books of accounts. More than often, the accounting cycle is often grouped into seven steps. It is best to breakdown down into several smaller steps so as to ensure that all steps are taken into account (Kieso, Weygandt, & Warfield, 2010).
The office of the chief financial officer “formulates and manages annual budget and performance plan, coordinates strategic planning, develops an annual performance and accountability report implement government performance result” (United States Environmental Protection Agency, 2013).
The officer also provides financial services and makes payments on behalf of the state and other agencies. The chief financial officer is Barbara J. Bennett, the deputy is Maryann Froehlich and associate chief financial officer is Joshua Baylson. The office of the chief financial officer comprises of seven sections. The sections represent the activities they carry out. The first section is the office of the budget.
The section is charged with the responsibility of formulating budgets. The office of the budget leadership is led by David bloom as the director. The deputy director is Carol Terris. This office offers the first step of the accounting cycle in the office of the chief financial officer (United States Environmental Protection Agency, 2013).
The second section is the office of planning, analysis and accountability. This section carries out strategic and annual planning, performance management and reporting efforts. The section aligns the strategies to the government budgets. The section is led by Kathy Sedlak O’Brien as the director and Allison Wiedeman as the acting deputy director. The third section carries out the third step of the accounting cycle of office.
The office provides policy, reports, and oversight essential. The section is headed by Steve Silzer and Jeanne Conklin as the deputy director.
The fourth section is the office of technology solutions. The section carries out “technology planning, standard setting and development and deployment of financial and resources management system for the agency” (United States Environmental Protection Agency, 2013).
The section is led by Quentin Jones and Robert Hill as the deputy director. The other sections such as office of the financial services, office of the resources and information management, and center for environmental finance for support services.
References
Hunt, F., Kieso, E., Weygandt, J., & Warfield, D. (2010). Intermediate accounting problem-solving survival guide. Hoboken, NJ: Wiley.
Kieso, E., Weygandt, J., & Warfield, D. (2010). Intermediate accounting. Hoboken, NJ: Wiley.
United States Environmental Protection Agency. (2013). About the office of the chief financial officer (OCFO). Web.