Discuss the key activities in the revenue, conversion, and expenditure cycles.

A financial transaction is an economic event that affects the assets and equities of the firm, is reflected in its accounts, and is measured in monetary terms. Financial transactions are common, repetitive events that involve external parties (customers or suppliers) or internal events (depreciation, use of materials, etc.). Similar transactions are grouped into cycles.

Conduct a preliminary search and:

  • Discuss the key activities in the revenue, conversion, and expenditure cycles.
  • What does an entity-relationship diagram represent? Why do accountants need to understand them?
  • There are two subsystems to the revenue cycle. Discuss what are they and what occurs within each.

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