Supplement - The Accounting Cycle

Question 1

What is the First Step in the Accounting Cycle?

Answer 1

to enter original documentation (Purchase invoices, sales invoices, payroll records) into the books of account.

Question 2

What is the Second Step in the Cycle?

Answer 2

it occurs on a monthly basis and it’s posting and balancing the journals and ledgers.

Question 3

What’s the Third Step of the Cycle?

Answer 3

Adjustments to the accounts to produce statements

Question 4

What is the fourth and final step of the Cycle?

Answer 4

To create the financial statements on a monthly basis and on a yearly basis