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.