The Accounting Cyle!

Fast, easy tricks on how to bring out the accountant in you!

Analyzing Transactions

Identifying and analyzing transactions involves looking at the source documents, such as bank statements, checks, and purchase orders, that describe the transactions and their purpose, including the transaction amount. It is then decided which accounts are affected by the transaction, and how exactly those accounts were affected.

2. Journalizing

Journalizing is the process of recording a transaction into a general journal. So, basically you're taking the financial information from your source document and transferring it to your general journal!

Posting

Posting is the transfer of the debits and credits from the journal to the ledger. While a journal is simply a list of transactions, a ledger is a collection of all of the company’s accounts

4. Adjustments

Adjustment entries are journal entries made at the end of the month to account for any expenditures or income for that specific period.

Prepare Financial Statements

  1. Income statement
  2. Retained earnings statement
  3. Balance sheet
  4. Cash flow statement

Post Adjustment and Closing Entries

Closing entries are journal entries made at the end of an accounting period which transfer the balances of temporary accounts to permanent accounts.
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