ACCOUNTING CYCLES

IDENTIFY TRANSACTIONS

• Prepare all documents before recording.

RECORD IN THE JOURNAL.

• The journal can be paper or electric.
• Transactions or recorded in chronological order.

POST TO LEDGER

• A collection of accounts that show changes.
• The balance of cash is determined from this.

UNADJUSTED TRIAL BALANCE.

• All accounts are added here.

ADJUSTING ENTRIES.

• All adjustments are made.

ADJUSTED TRIAL BALANCE.

• All accounts are added to get correct total.

PREPARE FINANCIAL STATEMENTS.

• This is the list of end products from the account system.

JOURNALIZE AND POST ENTRIES.

• Temporary accounts are closed.

POST CLOSING TRIAL BALANCE.

• The last step of the accounting cycle.
• This contains real accounts only.