Accountancy in Luxembourg

Accounting Cycle
The accounting cycle is a collective process of identifying, analyzing, and recording the accounting events of a company in Luxembourg. 8 stages of the Accounting Cycle:

Stage 1: Transaction identification
The accounting cycle begins with the identification of various transactions, for example, sales, returns, etc. (transcription identification).

Stage 2: Logging transactions
The next step is to write it down in the journal. Writes down the account number and various accounting transactions.

Stage 3: Posting
After writing the data to the journal, the accountant enters it into the general ledger.

Stage 4: Unadjusted Trial Balance
After the firm posts journal entries to individual general ledger accounts, an unadjusted trial balance is prepared. The trial balance ensures that total debits equal the total credits in the financial records.

Stage 5: Worksheet
The 5th step in cycling – analyzing a worksheet and identifying adjusting entries. A worksheet needs a company to make sure that debits and credits are equal. If there are discrepancies then adjustments will need to be made.

Stage 6: Adjusting Journal Entries
At the end of the period, the company should make the adjusting entries. These are the result of corrections made on the worksheet and the results from the passage of time.

Stage 6: Financial Statements
After the posting of adjusting entries, a company prepares an adjusted trial balance according to the actual formalized financial statements.

Stage 7: Closing the Books
Finally, An entity temporarily accounts, revenues, and expenses, at the end of the time using closing entries. These closing entries include transferring net income into retained earnings, a company prepares the post-closing trial balance to ensure debits and credits match and the cycle can start again.