Accounting Cylce

Always remember the Accounting Cycle, it is extremely vital!

What is the Accounting Cycle excatly?

The accounting cycle is the process of recording and processing the accounting events of a company. The series of steps begin when a transaction occurs and end with its inclusion in the financial statements.

STEPS

Steps in The Accounting Cycle

1. Analyze Transaction

2. Journalize

3. Post

4. Prepare work sheet

5. Prepare financial statements

6. Journalize adjusting and closing entries

7. Post adjusting and closing entries

8. Prepare post-closing trial balance

The Accounting Cycle

Description of steps

Analyze transactions

Questions asked

Which accounts are affected?

How is each account classified?

How is each classification changed?

How is each amount entered into the accounts?

Journalize

A journal is used to record transaction's in chronological order.

Steps include: Draw a T-account and record your transaction on the journal.

Post

Transferring information from a journal entry to a ledger account

Steps: Write the date, write the journal page number in the Post Ref column, write the debit amount in the debit column, write the new account balance in the balance debit column, and return to the journal and write the account number in the Post Ref column.

Worksheet

An accounting worksheet is a spreadsheet used to prepare accounting information and reports.

Prepare Financial Statements

A financial statement is a formal record of the financial activities and position of a business, person, or other entity.

Journalize adjusting and closing entries

record the Trial Balance Account Titles and amounts, also record the adjusting entries and extend all income statement account balances.

Post adjusting's and closing entries

Debit sales and credit income summary, also debit capital and credit drawing.