Question

Steps in the Accounting Cycle

Rearrange the following steps in the accounting cycle in proper sequence:

a. Transactions are analyzed and recorded in the journal.	1
b. An unadjusted trial balance is prepared.	2
c. Transactions are posted to the ledger.	3
d. Adjustment data are assembled and analyzed.	4
e. An adjusted trial balance is prepared.	5
f. Adjusting entries are journalized and posted to the ledger.	6
g. An optional end-of-period spreadsheet is prepared.	7
h. A post-closing trial balance is prepared.	8
i. Financial statements are prepared.	9
j. Closing entries are journalized and posted to the ledger.	1

Answer 1

Accounting Cycle

a. Transactions are analyzed and recorded in the journal. 1

c. Transactions are posted to ledger 2

b. An unadjusted trial balance is prepared 3

g. An optional end of period spreadsheet is prepared 4

d. Adjustment data are assembled and analyzed 5

f. Adjusting entries are journalized and posted to ledger 6

e. An adjusted trial balance is prepared 7

j. Clsing entries are journalized and posted to the ledger 8

h. Post- closing trial balance is prepared 9

i. Financial statements are prepared    10

What Is the Accounting Cycle?
The accounting cycle is a collective process of identifying, analyzing, and recording the accounting events of a company. It is a standard 8-step process that begins when a transaction occurs and ends with its inclusion in the financial statements.

Steps of the Accounting Cycle
There are eight steps to the accounting cycle.

Identify Transactions: An organization begins its accounting cycle with the identification of those transactions that comprise a bookkeeping event. This could be a sale, refund, payment to a vendor, and so on.
Record Transactions in a Journal: Next come recording of transactions using journal entries. The entries are based on the receipt of an invoice, recognition of a sale, or completion of other economic events.
Posting: Once a transaction is recorded as a journal entry, it should post to an account in the general ledger. The general ledger provides a breakdown of all accounting activities by account.
Unadjusted Trial Balance: After the company posts journal entries to individual general ledger accounts, an unadjusted trial balance is prepared. The trial balance ensures that total debits equal the total credits in the financial records.
Worksheet: Analyzing a worksheet and identifying adjusting entries make up the fifth step in the cycle. A worksheet is created and used to ensure that debits and credits are equal. If there are discrepancies then adjustments will need to be made.

Adjusting Journal Entries: At the end of the period, adjusting entries are made. These are the result of corrections made on the worksheet and the results from the passage of time. For example, an adjusting entry may accrue interest revenue that has been earned based on the passage of time.
Financial Statements: Upon the posting of adjusting entries, a company prepares an adjusted trial balance followed by the actual formalized financial statements.
Closing the Books: An entity finalizes temporary accounts, revenues, and expenses, at the end of the period using closing entries. These closing entries include transfering net income into retained earnings. Finally, a company prepares the post-closing trial balance to ensure debits and credits match and the cycle can begin anew