ACCOUNTING CYCLE

reports and statements.ACCOUNTING CYCLE It comprises the sequence of accounting processes. The most important output of the accounting cycle is an enterprise·s financial statements. It begins with transactions and ends with carrying forward the balances in balance sheet accounts to the next accounting period. Accounting cycle produces numerous records. entries. The accountant performs the steps in the accounting cycle one after the other and repeats them year after year in each accounting period. . documents.

Step1 Understand and analyze business transaction Step 2 Record the transactions in the journal Step 3 Post the journal entries in the ledger Step 4 Prepare a trial balance Step 5 Record adjustments for defferals and accruals .

expense and dividend accounts at the end of the period Step 9 Prepare post-closing trial balance Step 10 Carry forward the balances in balance sheet accounts to the next period .Step 6 Prepare an adjusted trial balance Step 7 Prepare financial statement from the adjusted trial balance Step 8 Close revenue.

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