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Accounting Cycle

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What is Accounting Cycle?

This is a term given to the step-by-step process of recording and processing of economic transactions of a company.

The accounting cycle helps in the creation of useful financial information in the form of financial statements.

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The steps involved in the Accounting Cycle are as under:

1. Collecting and analyzing transactions via journal entries

2. Posting journal entries to ledger accounts3. Preparing unadjusted trial balance4. Preparing adjusting entries5. Preparing adjusted trial balance6. Organizing the accounts into the financial

statements7. Closing temporary accounts via closing entries8. Preparing post-closing trial balance

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 Accounting software programs  Accounting software programs are now gaining

popularity among businesses worldwide. 

Only a handful of companies perform the accounting cycle by hand.

Computerized accounting systems have enabled businesses to bring down mathematical errors in the accounting process to a large extent.

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