The Accounting Cyle!
Fast, easy tricks on how to bring out the accountant in you!
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.
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 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
Prepare Financial Statements
- Income statement
- Retained earnings statement
- Balance sheet
- 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.