The Accounting Cycle

Follow these steps to be a very successful accountant!

The 8 steps

  1. Analyzing your transactions: this begins the accounting cycle. These transactions can include the sale or return of a product.
  2. Journalizing: placing the transactions in a book of original entry. In order to do this, you must maintain the journal's chronological order of transactions.
  3. Posting: placing the transactions into the account that it impacts. This journal is the general ledger, where you can find a summary of all the business' accounts.
  4. Preparing a worksheet: You complete this step by entering the account balances and adjustments into the columns of the worksheet.
  5. Preparing financial statements: The financial statements are prepared by placing the assets, liabilities, and equity into the work sheets.
  6. Journalizing adjusting/closing entries: transferring the revenue and expenses to the journal
  7. posting adjusting/closing entries: putting then into the journal for balancing
  8. Preparing post-closing trial balance: comparing the debits to credits to make sure they are in balance at the end of the month