![]() For example, in preparing a cash ledger account, you must post all Debits (receipts) and Credit (payments) into a statement and the difference between these two including the opening balance of cash will be the closing balance. Ledger posting simply refers to posting the financial transactions recorded in journal books to individual ledger statements. Here, all the transactions are recorded in chronological order along with the ledger accounts involved, amounts in Dr/Cr and narration (a brief note on the transactions) This step of the accounting cycle is also known as a journal entry and the book in which it is recorded is a journal book. In this accounting cycle, the bookkeeper or accountant records the financial transaction in the book of accounts. The next step of the accounting cycle is the most crucial and important. Recording of transactions in the books of accounts Here, the accountant or bookkeeper analyze the nature of transactions, accounts impacted etc. and keeps the data ready to complete the next step of the accounting cycle. In this accounting cycle, the accountant or the bookkeeper collects the data of all the transactions such as purchases, sales, payments, receipts etc. The first step of the accounting cycle beings with the identification of financial transaction that have occurred in the business. The accounting cycle consists of 8 steps listed below: Whether you are a business owner or aspiring accountant, it is important to know and understand the process involved in the accounting cycle. The key steps in the eight-step accounting cycle include recording journal entries, posting to the general ledger, calculating trial balances, making adjusting entries, and creating financial statements. The process of accounting cycle consists of several steps that help record and analyse your financial data. ![]() The accounting cycle starts right from the identification of business transactions and ends with the preparation of financial statements and closing of books. ![]() ![]() The accounting cycle refers to the complete process of accounting procedure followed in recording, classifying and summarizing the business transactions. ![]()
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