1. ACTG 313
October 18, 2017

2. Unit 11 – Other Transaction Cycles
October 18, 2017

3. Transaction Cycles
Purchasing Cycle
Revenue Cycle
Payroll Cycle

4. Capital Asset Cycle

5. Capital Asset Cycle

6. X Capital Asset Cycle Identification of Need Justification (ROI)
Authorization of Procurement
Permitting if necessary
Site Preparation if necessary
Purchase or Construction
Installation, Set-Up, etc.
Training (sometimes)
Capitalization on the books
Periodic Depreciation
Disposal X

7. Capital Asset Life Cycle
Capital Asset Cycle
Capital Asset Life Cycle
Capital Asset Acquisition Cycle
Investing Cycle

8. Financing Cycle

9. Balance Sheet Long-Term Liabilities Long-Term Assets Equity
CAPITAL ASSET TRANSACTION CYCLE
FINANCING TRANSACTION CYCLE
CAPITAL TRANSACTION CYCLE
Long-Term Liabilities
Equity
Long-Term Assets

10. Capital Acquisition Cycle
Financing Cycle
Identification of Need for Money
Justification (ROI)
Decision of which way to raise the money (Equity vs LTL)
Issuance of Stocks or Bonds, or loan arrangement
“Closing” or IPO, loan, bond, or other
Compliance with Covenants and Restrictions
Periodic Calculation/Payment of Interest, or Dividends
Retirement of Debt
Capital Acquisition Cycle

11. Research and Development Cycle

12. Research and Development Cycle

13. Research and Development Cycle

14. Research and Development Cycle

15. Research and Development Cycle
Identification of the need
Basic Research vs. Applied Research
Procurement of Resources Necessary
Application of Resources, Tracking, Analysis
Patents, Copyrights, Trademarks, etc. (Intellectual Property)
Determination of Accounting Treatment
Amortization

16. Raw Materials PURCHASES
Manufacturing Cycle
Design and Engineering
Raw Materials Delivery, Logistics, Storage, Usage
Scheduling
Actual Conversion Activities
Labor
Overhead Application and Costing, ABC
Movement of Costs to Finished Goods
Cost Analysis?
Raw Materials PURCHASES
Labor PAYROLL
Supplies PURCHASES
Finished Goods SALES
Conversion Cycle

17. Accounting Cycle Open the period
Reversing Entries from prior period’s accruals/deferrals
Transaction recording
Trial Balance
Adjusting Entries (accruals/deferrals)
Financial Statement Preparation
Closing Entries

18. Transaction Cycles Purchasing Cycle Revenue Cycle Payroll Cycle
Investing Cycle (Capital Asset Cycle)
Financing Cycle
R&D Cycle
Manufacturing Cycle (*)
* -- Not a true TRANSACTION cycle, but often considered one