Introduction to Basic Accounting by Tarannum Khatri - HTML preview

Accounting cycle is process starting from recording transactions to closing books of accounts.

We can understand accounting cycle from above image.

First step is recording transactions in journal.

Second step is doing ledger entry from journal.

Third step is balancing ledger and preparation of trial balance.

Fourth step is doing adjusting entries.

Fifth step is preparation of adjusted trial balance.

Sixth step is preparation of profit and loss account and balance sheet ( preparation of financial statements)

Last step is doing closing entry and preparation of closing trial balance.