Accounting Cycle Steps
Learn the 8 Steps to The Accounting Cycle
What Is It?
The Accounting Cycle is the collective process of recording and processing the accounting events of a company. The accounting cycle is a methodical set of rules to ensure the accuracy and conformity of financial statements. Computerized accounting systems have helped to greatly reduce mathematical errors in the accounting process, but the uniform process of the accounting cycle also helps reduce mistakes.The series of eight steps begin when a transaction occurs and end with its inclusion in the financial statements.
Steps 1-3
- Analyzes Transactions
- Journalize
- Post
Steps 4-6
- Prepare Work Sheet
- Prepare Financial Statements
- Journalize Adjusting and Closing Entries
Steps 7&8
- Post Adjusting and Closing Entries
- Prepare Post-Closing Trial Balance
Overview of the Accounting Cycle - Slides 4-6