The Accounting Cycle

Step 1

Analyze business transactions (daily)

Step 2

Journalize the transactions (daily)

Step 3

Post to the ledger accounts (daily)

Step 4

Prepare a trial balance (monthly, quarterly, annually)

Step 5

Journalize and post adjustments (monthly, quarterly, annually)

Step 6

Prepare adjusted trial balance (monthly, quarterly, annually)

Step 7

Prepare financial statements (monthly, quarterly, annually)

Step 8

Journalize and post closing entries (end of annual period)

Step 9

Prepare a post-closing trial balance (end of annual period)

Reversing entries

adjustments made at the beginning of the next accounting period