Please explain Accounting cycle

Question

Accepted Answer

The accounting cycle is a series of steps that a company follows to record and report its financial transactions.

The cycle starts with identifying and analyzing transactions
Then, the transactions are recorded in the journal
The journal entries are then posted to the ledger
An unadjusted trial balance is prepared to ensure the debits and credits are equal
Adjusting entries are made to update accounts for accruals and deferrals
An adjusted trial balance is prepared to ensure the accounts are up-to-date
Financial statements are prepared using the adjusted trial balance
Closing entries are made to reset the accounts for the next period
A post-closing trial balance is prepared to ensure the accounts are balanced
The cycle starts again for the next accounting period

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