THE ACCOUNTING CYCLE

🔄 Cycle Master

The bookkeeping cycle is a strict sequence of 9 procedures. Test your understanding of chronological workflow, trial balance milestones, adjusting entries, and fiscal year-end closings!

Lesson: The 9-Step Accounting Cycle

Accounting procedures follow an exact chronological order during every accounting period:

Step #	Cycle Phase	Primary Action & Purpose
1	Analyze Transactions	Examine source documents (invoices, receipts, bank notices).
2	Journalize	Record debits and credits in the General Journal (chronological).
3	Post to Ledger	Transfer entries from Journal to General Ledger T-accounts.
4	Unadjusted Trial Balance	Verify Total Debits = Total Credits before period-end adjustments.
5	Adjusting Entries	Record accruals, deferrals, and depreciation to update accounts under GAAP.
6	Adjusted Trial Balance	Prove ledger equality after adjustments; directly used to draft reports.
7	Financial Statements	Draft Income Statement $\rightarrow$ Retained Earnings $\rightarrow$ Balance Sheet.
8	Closing Entries	Reset temporary/nominal accounts (Revenues, Expenses, Dividends) to zero.
9	Post-Closing Trial Balance	Verify that only permanent (Balance Sheet) accounts remain open.

🔄 Cycle Master

Cycle Completed!

Lesson: The 9-Step Accounting Cycle