Accounting Cycle Steps

By wadeackerman
  • 1 CE

    Step 1: Analyze the Transaction

    This step requires you to think about what is going on in the transaction, and what accounts are being impacted.
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    Step 2: Journalize Transaction

    After deciding which accounts are affected, show those changes in your journal by debiting and crediting the appropriate accounts.
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    Step 3: Update Ledger

    After journalizing, you will want to go to your general ledger of accounts and reflect on the changes made in your journal entries.
  • 4

    Step 4: Prepare Trial Balance

    Give an estimated look at how your accounts will look after updating your ledger.
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    Step 5: Prepare Financial Statements

    Once you have everything ready, all you have to do is create your balance sheet and income statement based on the changes you have made.