The Accounting Cycle

The 8 Steps of Accounting

1. Analyze Transactions

Transactions from information (source documents) are recorded in a general journal.

2. Journalize

Transactions from information (source documents) are recorded in a general journal.

3. Post

Journal entries are posted to the general ledger.

4. Prepare Work Sheet

A work sheet, including a trial balance, is prepared from the general ledger.

5. Prepare Financial Statements

Financial statements are prepared from the work sheet.

6. Journalize Adjusting and Closing Entries

Adjusting and closing entries are journalized from the work sheet.

7. Post Adjusting and Closing Entries

Adjusting and closing entries are posted to the general ledger.

8. Prepare Post-Closing Trial Balance

A post-closing trial balance of the general ledger is prepared.
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