The accounting cycle
The accounting cycle is an activity performed in an accounting period that help the business keep its records in an orderly fashion
There are nine steps to the accounting cycle
- Collect and Verify source documents
- Analyze each transaction
- Journalize each transaction
- Post to the ledger
- Prepare a trial balance
- Prepare a worksheet
- Prepare financial statements
- Journalize and post closing entries
- Prepare a post-closing trial balance
The accounting cycle is used to show the businesses growth or decline over a period of time, usually a month. Also, it is used to establish a check points to measure the financial success of the business or organization. The account collected in the cycle can be used to compare other forms of data also collected.
There are nine steps to the accounting cycle
- Collect and Verify source documents
- Analyze each transaction
- Journalize each transaction
- Post to the ledger
- Prepare a trial balance
- Prepare a worksheet
- Prepare financial statements
- Journalize and post closing entries
- Prepare a post-closing trial balance
The accounting cycle is used to show the businesses growth or decline over a period of time, usually a month. Also, it is used to establish a check points to measure the financial success of the business or organization. The account collected in the cycle can be used to compare other forms of data also collected.