1. The Accounting
Cycle
3 July 2013

2. Steps in the Accounting Cycle
• Analyzing business transactions through
source documents (business documents)
• Business Transactions? Personal
Transactions?
• Effect on the basic accounting equation?

3. Steps in the Accounting Cycle
 › Journalizing, or the recording of
transactions in a Journal or Book of
Original Entry

4. Sample of a Journal

5. Steps in the Accounting Cycle
 Posting, or transferring of the account
from the Journal to the Ledger or the Book
of the Final Entry

6. Standard Form
Running Balance Form

7. Steps in the Accounting Cycle
 Balancing of the accounts and
preparation of the trial balance
 Trial Balance - a list of account balances
taken from the ledger

8. Steps in the Accounting Cycle
 Preparation of the 10-column worksheet
 Journalizing and posting adjusting entries
 Preparation of the financial statements
based on adjusted balances
 Recording and posting of closing entries

9. Steps in the Accounting Cycle
 Balancing and preparing a Post-Closing
Trial Balance from the list of open account
balances taken from the ledger
 Preparation of the reversing entries for
certain adjusted accounts to enable the
business to maintain the same method of
recording certain transactions from one
period to another. This is optional.