Question: What is the accounting cycle? The accounting cycle is the process by which companies produce their financial statements for a specific period.
1. Start with the beginning account balances.
2. Analyze and journalize transactions as they occur.
3. Post journal entries to the accounts.
4. Compute the unadjusted balance in each account, and prepare the unadjusted trial balance.
5. Enter the unadjusted trial balance on the worksheet, and complete the worksheet (optional).
6. Journalize and post adjusting entries.
7. Prepare the adjusted trial balance.
8. Prepare the financial statements.
9. Journalize and post the closing entries.
10. Prepare the post-closing trial balance.