The first step in the accounting cycle is to analyze business transactions

The first step in the accounting cycle is to analyze business transactions

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The first step in the accounting cycle is to analyze business transactions. The next step known as journalizing, recording the transactions in a General Journal. The third step is posting is to post to the ledger account. The fourth step is the preparation of a trial balance. The fifth step is to journalize and post adjusting entries, prepayments such as prepayments and accruals adjustments, accounts for internal transactions, like the use of unearned revenue or prepaid rent. The sixth step is the preparation of the adjusted trial balance, is about all internal and external transactions for the reporting period and again verifying their accuracy by ensuring the credit and debit sums are equal. The seventh step of accounting
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Unformatted text preview: is preparing business financial Statements from the adjusted trial balance, a number of important financial statements are created. The Income Statement and Statement of Owner's Equity are prepared first, then the Balance Sheet, Statement of Owner's Equity. The eighth step in the accounting cycle is closing temporary accounts preparing for the next period. The last step is preparing a post-closing trial balance lists from the balances of the accounts that were not closed, such as assets, liabilities, and owner's equity....
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