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.