The Accounting Cycle

The 8 Steps of the Accounting Cycle

1. Analyzing Transactions- This is where accountants look at transactions and figure out the debits and credits.

2. Journalizing- This is where the amounts get recorded in the general journal.

3. Posting- The amounts from the journal get posted to the general ledger.

4. Preparing Work Sheet- Income statement columns must equal the total of the balance sheet columns.

5. Preparing Financial Statements- In order to prepare financial statements, you must record the values in the income statement and balance sheets.

6. Journalizing Adjusting and Closing Entries- The adjusting and closing entries are recorded in the general journal.

7. Posting Adjusting and Closing Entries- The adjusting and closing entries from the general journal are posted into the general ledger.

8. Preparing Post-Closing Trial Balance- The assets must equal the liabilities + owner's equity when finished.

The Accounting Cycle