Steps in the Accounting Cycle Accounting Kerri Perry.

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Presentation transcript:

Steps in the Accounting Cycle Accounting Kerri Perry

The Accounting Cycle Step #1 Analyze Business Transactions Step #5 Journalize & Post Adjusting Entries: Deferrals/Accruals Step #6 Prepare an Adjusted Trial balance Step #2 Journalize the Transactions Step #3 Post to Ledger Accounts Step #8 Journalize and Post Closing Entries Step #9 Prepare a Post Closing Trial Balance Step #7 Prepare Financial Statements: Income Statement, Owner’s Equity Statement, Balance Sheet Step #4 Prepare a Trial Balance *Optional Steps: If a worksheet is prepared, steps 4-6 are incorporated in the worksheet. If reversing entries are prepared, they occur between stages 9 and 1.

Question #1 How many steps are required in the accounting cycle? – 8 steps 8 steps – 5 steps 5 steps – 9 steps 9 steps – 7 steps 7 steps

Question #2 What does the first step of the accounting cycle include? – Posting to ledger accounts Posting to ledger accounts – Analyzing business transactions Analyzing business transactions – Preparing an adjusted trial balance Preparing an adjusted trial balance – Journalizing transactions Journalizing transactions

Question #3 Which of the following is not a financial statement (part of step #7)? – Balance sheet Balance sheet – Income statement Income statement – Balance statement Balance statement – Owner’s Equity Statement Owner’s Equity Statement

Question #4 True/False-There are optional steps to the accounting cycle? – True True – False False

Question #5 What does the last step in the accounting cycle include? – Preparing financial statements Preparing financial statements – Journalizing and posting closing entries Journalizing and posting closing entries – Preparing an adjusted trial balance Preparing an adjusted trial balance – Preparing a post-closing trial balance Preparing a post-closing trial balance

Correct! Forward to Question #3 Forward to Question #5 Forward to Question #4 Forward to Question #2

Incorrect! Back to Question #1

Incorrect! Back to Question #2

Incorrect! Back to Question #3

Incorrect! Back to Question #4

Incorrect! Back to Question #5