The accounting cycle ensures accurate and reliable accounting information by repeating annual steps. These steps include preparing source documents, recording transactions in original books of entry, posting transactions to ledgers, transferring balances to a trial balance, adjusting entries and errors, preparing an adjusted trial balance, and producing financial reports. The cycle shows the process of accounting from initial transaction to final reporting.

1. THE
ACCOUNTING
CYCLE
SECTION 2
Objective 2
Prepared by: Dyann Barras

2. PURPOSE
OF THE
ACCOUNTING CYCLE
 The Purpose of the Accounting Cycle is to show the
repeated annual steps of the accounting process.
•The steps of the cycle ensure that the Accounting
information is accurate, reliable and consistent.

3. STEP 1:
PREPARING
Prepare and Classify
source documents for
transactions.

4. STEP 2: RECORDING
Record transactions
in books of Original
Books of Entry.

5. STEP 3: POSTING
 Post transactions from
books of Original Books of
Entry to the Ledgers.

6. STEP 4: TRANSFERING
Transfer balances from ledger Accounts to Trial
Balance.

7. STEP 5: ADJUSTING
Make Adjusting entries and
correct errors.

8. STEP 6: PREPARING
Prepare Adjusted Trial Balance.

9. STEP 7: PREPARE FINANCIAL
REPORTS

10. Student –Led Activity - Puzzle: Insert in the
correct steps