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Accounting Cycle

Bookkeeping Basics
The accounting cycle is often described as a process that includes the following steps:
  • Identifying, collecting and analyzing documents and transactions
  • Recording the transactions in journals
  • Posting the summarized journals to accounts in the general and subsidiary ledgers
  • Preparing an unadjusted trial balance and perhaps preparing a worksheet
  • Determining and recording adjusting entries
  • Preparing an adjusted trial balance
  • Preparing the financial statements
  • Recording and posting closing entries
  • Preparing a post-closing trial balance
  • Recording reversing entries

Accounting Cycle Today
The cycle actually refers to the steps performed in a manual accounting and bookkeeping system. With the advent of computers and inexpensive (some free) accounting and bookkeeping software once a transaction is entered all summarization, posting, and updating of all the records is automatically handled by the computer and the software. A reason every business not already using computer bookkeeping software should consider taking the "plunge".
Accounting Cycle Videos
Accounting Cycle Quiz

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Knoxville, TN 37918
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