the accounting cycle

1

business transactions occur impacting the organization

2

review GAAP to see how and when the transaction is recorded

3

select impacted accounts from chart of accounts

4

record journal entries during the accounting period

5

post and aggregate the journal entries to the general ledger accounts

6

prepare the unadjusted trial balance

7

record the adjusting journal entries at the end of the accounting period

8

post and aggregate the adjusting journal entries to the general ledger accounts

9

prepare the adjusted trial balance

10

prepare financial statements based on ending account balances in the adjusted trial balance

10a

income statement

10b

statement of stockholders’ equity

10c

balance sheet

10d

statement of cash flows

11

record closing journal entries to close temporary accounts (revenues, expenses, dividends)