The Process of the Accounting Cycle The process that goes through analyzing and journalizing transactions and is finished with a post-closing trial balance is the accounting cycle. The accounting cycle reports the financial information during the accounting period. It has 10 steps. In order to do it all correct it is better to follow step by step, instead of rushing it then later have problems with the number not adding up. Here all the steps and the explanations throughout the accounting cycle. First step is that the transactions are analyzed and recorded in the journal. In easier terms, you look at the transactions that happened during the accounting period and then enter them into the journal. To make sure, that everything is done right follow four easy steps. Read each description of the transactions to know if an asset, liability, owner’s equity, revenue, expense or drawing account is affected. Then next look at each account and see if it increases or decreases. After you determine that, the record them as debit or credit by following the rules of debit and credit. An example, since asset accounts are increased with debits, they normally have debit balances, and liabilities usually have a credit balance. After all that, then you record each transaction using a journal entry. The second step of the accounting cycle is posting the transactions to the ledger. Transactions that are entered into the journal are then posted to the accounts in the ledger. Debits and credits are recorded to the account in order as they are in the journal. You enter the date in the Date column, and then the amount is entered either in the Debit or Credit column depending if it is a debit or credit. The journal page number is recorded onto the Post Reference column in the ledger, and after that the account number is recorded in the Post Reference column in the journal. This way, if