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.