Accounting Cycle

The language of Business

The 8 steps of accounting cycle

Step 1: Analyze Transactions- Source documents are checked for accuracy, and transactions are analyzed into debit and credit parts.


Step 2: Journalize-

Transactions, from information on source documents, are recorded in a general journal.


Step 3: Post-

Journal entries are posted to the general ledger.


Step 4: Prepare Worksheet

A work sheet, including a trial balance, is prepared from the general ledger


Step 5: Prepare Financial Statements

Financial statements are prepared from the work sheet.


Step 6: Journalize Adjusting and closing entries

Adjusting and closing entries are journalized from the work sheet.


Step 7: Post Adjusting and Closing Entries

Adjusting and closing entries are posted to the general ledger.


Step 8: Prepare Post-Closing Trial Balance

A post-closing trial balance of the general ledger is prepared.



The Accounting Cycle