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.