Steps in The Accounting Cycle

10 May


The steps in accounting cycle are list in order below.

1).  Prepare a trial balance

2)   Prepare an adjusted trial balanc

3).   Journalize and post adjusting entries

4).   Journalize the transaction

5).   Journalize and post closing entries

6).   Prepare a financial statement

7).   Prepare a post closing trial balance

8).   Post to ledger account

9).   Analyze business transaction

List the steps in proper sequence assuming no worksheet is prepared

a.   9-4-8-3-1-2-6-5-7            d.  9-4-8-1-3-2-6-7-5

b.   9-4-8-3-1-2-6-7-5            e.    1-2-3-4-5-6-7-8-9

c.    9-4-8-1-3-2-6-5-7

Steps in The Accounting Cycle

Identify the Transaction
Identify the event as a transaction
and generate the source document.
Analyze the Transaction
Determine the transaction amount,
which accounts are affected,
and in which direction.
Journal Entries
The transaction is recorded in
the journal as a debit and a credit.
Post to Ledger
The journal entries are transferred
to the appropriate T-accounts
in the ledger.
Trial Balance
A trial balance is calculated
to verify that the sum of the debits
is equal to the sum of the credits.
Adjusting Entries
Adjusting entries are made for
accrued and deferred items.
The entries are journalized and
posted to the T-accounts
in the ledger.
Trial Balance

A new trial balance is calculated
after making the adjusting entries.
Financial Statements
The financial statements
are prepared.
Closing Entries
Transfer the balances of the
temporary accounts
(e.g. revenues and expenses)
to owner’s equity.
Trial Balance

A final trial balance is
calculated after the closing
entries are made.

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Posted by on 10 May 2011 in OSN_ekonomi


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