I am a commerce student in india and preparing for board exams. I am having a hard time understanding the complete accounting cycle. Can someone explain it to me simply with examples?
The accounting cycle starts with recording business transactions in a journal. Then the transactions are posted to ledgers to calculate balances in each account. Next, temporary accounts are closed by preparing an income statement and balance sheet. Finally, financial statements are prepared to analyze the business.
The basic steps are: 1) Journalize transactions 2) Post to general and subsidiary ledgers 3) Prepare trial balance 4) Identify and record adjusting entries 5) Prepare an adjusted trial balance 6) Prepare income statement and balance sheet 7) Close revenue and expense accounts 8) Prepare post-closing trial balance
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