The Accounting Cycle
Learn the 8 steps!
1.) First, analyze the transactions in order to enter it into an appropriate account.
2.) Journalize each transaction by putting them into the general journal.
3.) Put the transactions into the general ledger, which is posting.
4.) Prepare a worksheet of all the journal and ledger accounts.
5.) Next, take the information from the worksheet and prepare financial statements. The information goes into a balance sheet and income statement.
6.) Check for adjusting entries and journalize them. Then, close the entries that need to be closed to a zero balance.
7.) Post the adjusting and closing entries into the general ledger.
8.) Prepare a post-closing trial balance and make sure the debit and credit sides add up. If they do, you are accurate with all your transactions. If not, look back over and fix something.