what-is-an-accounting-cycle-and-the-steps-involved

Accounting cycle is a series of accounting process which begins with the identification of an economic activity or transaction, recording of economic activity and ends with the preparation of the financial statements. The Accounting cycle is a repeated process where one cycle ends and another cycle is repeated again.

The steps involved in accounting cycle:

• Analyse source documents like invoices, receipts, payments vouchers, etc


• Record transactions in journals (Sales journals, Purchase journals, etc)


• Post to ledger accounts


• Prepare unadjusted trial balance


• Journalize adjusting entries


• Post adjusting entries


• Prepare adjusted trial balance


• Journalize closing entries


• Post closing entries


• Prepare post closing trial balance


• Prepare financial statements like the Income Statement, Balance sheet, Cash flow statememt etc.