The Accounting Cycle

Learn to journalize, post, prepare statements, and more!

The steps, in order

1. Analyze transactions: Break the transactions down into debit and credit parts.

2. Journalize: Use double-entry accounting methods to put transactions in the journal.

3. Post: Copy and paste the journal entries from the journal to the ledger.

4. Prepare worksheet: Include a trial balance column to make sure the debits and credits are correct.

5. Prepare financial statements: The income statement (revenue and expenses) and balance sheet (assets, liabilities, owner's equity) are made.

6. Journalize adjusting entries and closing entries: Perform adjustments for the expense accounts and their asset partners. Closing entries are for sales, expenses, capital (net income) and drawing.

7. Post adjusting and closing entries: The same as step 3 is done for the adjustments and closing entries.

8. Prepare post-closing trial balance: This is done to prove the assets= liabilities + owner's equity.

Tips to Becoming a Future Accountant

It is important to take accounting courses in high school and college, while taking internships before finding a career.

Need Help?

The video and link below will help you if you are struggling with the basics of accounting.
Learn Accounting in 1 HOUR First Lesson: Debits and Credits
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Accounting: The Language of Business