ACCOUNTING CYCLE Definition

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ACCOUNTING CYCLE is the sequence of steps in preparing the financial statements for a given period. It refers to the fact that because financial reports are given each period (usually a year) there are a set of steps (cycle) taken each period that result in the reports and preparation for the next period or cycle. The term cycle is used because every period there is a start and an end. The cycle usually starts with the budget, goes through the journal entries, adjusting entries, posting to the accounts, financial reports, and closings.

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NORMALIZED EARNINGS is earnings that have been adjusted in order to take into account the effect of cycles in the economy.

PERTURBATION CONTROL is a restriction control to limit the access a particular user has to details in a database.  It introduces noise into the output (perturbs, or changes it) to shield the specifics of one record from the person who has only access to summary information.

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