The Bookkeeping Cycle

The Bookkeeping Cycle

Bookkeeping is the process of recording the business transactions in order to prepare financial reports of the business at a given time. Here are the steps in the bookkeeping process:

The Bookkeeping or Accounting Cycle Steps:

1. Collating of source documents such as official receipts, cash vouchers, sales invoices and related documents like purchase orders, credit memos, etc.
2. Recording of transactions into the journals like cash receipts, cash disbursements, general journal, sales journal and purchases journals.
3. Posting entries from journals to the general ledger.
4. Preparation of unadjusted trial balance.
5. Prepare adjusting entries at the end of the month, worksheet and adjusted trial balance.
6. Preparation of Financial Statements like Balance Sheet and Income Statement.
7. Prepare closing entries for temporary or nominal accounts and post-closing trial balance.
8. Prepare reversing entries but can be optional.

• Share This