Accounting Cycle

The Steps to the Accounting Cycle

Step 1: Analyze Transactions

This is the first step a you take in the accounting cycle. All you do is Analyze the transactions of the business from source documents.

Step 2: Journalize

This is the part where you take your balances and write them down in a journal hence the title journalize.

Step 3: Post

This step you post all the information from the journal into a general ledger. Everything will either be in a debit or a credit column.

Step 4: Prepare Worksheet

This is where adjustments are made.

Step 5: Prepare Financial Statements

You separate this part into three sections. The balance sheet, income statement and the financial statement.

Step 6: Journalize Adjusting and Closing Entries

This is the same as step 2 but only for the adjusting and closing entries.

Step 7: Post Adjusting and Closing entries

This is the same as step three but only for the adjusting and closing entries.

Step 8: Prepare Post-Closing trial balance

This is when you add up all of the assets and expenses and find out if you made a net income or a net loss.

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