Accounting and Finance Foundations

Unit 5

Accounting and Finance Foundations Unit 5: Accounting Terminology 423

Accounting Terminology

Chapter 15

Student Guide

Lesson 15.3 Completing the Accounting Cycle

Collecting and analyzing the source documents and then recording the transactions in journals are the first

two steps of the accounting cycle. The accounting cycle is the process or series of steps that accountants

use to provide financial data that are useful to decision makers. To complete the accounting cycle, an

accountant follows the following steps:

The accounting cycle begins when a transaction occurs and ends when closing entries are posted to the

trial balance. This series of steps is completed each accounting period. The accounting cycle helps to en-

sure that business transactions are recorded accurately and kept orderly within the accounting records.

1. Analyze the transactions and source documents.


2. Journalize entries into the general journal.


3. Post the general journal to the general ledger.


4. Prepare adjusting entries, vouchers, and the trial
   balance.
   5. Prepare financial statements.
   6. Analyze and review the financial statements.
   7. Prepare closing entries.
   8. Post the closing entries to the trial balance.

Prepare Adjusting

Entries, Vouchers, and

the Trial Balance

Prepare adjusting entries, vouchers, and the trial bal-
ance.