The Accounting Cycle

the 8 steps and everything in between

Analyze Transactions

Questions to ask yourself:

  • Which accounts are affected?
  • How are they being affected?
  • What is credit? What is debit?
  • What is the amount?


Write the account to be debited, along with the amount.

Write the account to be credited, along with the amount.


Transfer information from the general journal to the ledger, a collection of all of the businesses accounts.

Prepare a Worksheet

Put the accounts into a trial balance to see if any adjustments need to be made. Assets=Liabilities+Owner's Equity

Prepare Financial Statements

How much money has the business made or lost in a time period?

Journalize Adjusting and Closing Entries

Make corrections to the journal until the sides are balanced.

Post Adjusting and Closing Entries

List the final balances of all of your accounts in the ledger. Temporary accounts should equal zero.

Prepare Post-closing Trial Balance

Check the balance of your permanent accounts, making sure that they equal the same amount.