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NEW The "accounting cycle" is the name of a procedure or process of recognizing, recording, summarizing, and analyzing economic events of a business. For any business entity, recording its financial and non-financial information is important. The accounting cycle fulfills the purpose of record-keeping and serves for analysis as well.
The accounting cycle provides accounting information and is recorded in a specific period. Such period could be a fiscal year of a firm, or a month, or any other specific accounting period of a firm. All the recordings made are based on some standard accounting principles system like GAAP and IFRS.
Steps in the Accounting Cycle
The accounting cycle comprises of eight collaborative steps. They are:
1. Identifying the transactions
2. Recoding these transactions into the general journal
3. Posting these transactions into the ledger
4. Preparing a trial balance
5. Making adjusting entries
6. Making a worksheet
7. Preparing financial statements
8. Cl
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