The Accounting Cycle

The 8 Steps of the Accounting Cycle

The first step is to Analyze Transactions which means observing the change in financial position of the business because of business transactions.

The second step is to Journalize is when you form for recording transactions in chronological order.

The third step is to Post which is The process of transferring entries from a journal of original entry to a ledger book.

The fourth step is to Prepare a work sheet which is when you set up a worksheet.

The fifth step is to Prepare financial statements which is setting up financial statements.

The sixth step is to Journalize adjusting and closing entries which is journalizing the entries.

The seventh step is to Post adjusting and closing entries which is when you move all of the adjusting and closing entries from the journal to a ledger.

The last step is to Prepare post-closing trial balance which is to make sure everything evens up.