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Question
Which is the correct sequence of the following steps in the accounting cycle?
Which is the correct sequence of the following steps in the accounting cycle?
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Solution
- Prepare journal entries, analyse transactions, prepare an adjusted trial balance.
- Prepare adjusted trial balance, prepare closing entries, and prepare financial statements.
- Post adjusting journal entries, prepare adjusted trial balance, prepare financial statements.
- Post closing entries, prepare financial statements, prepare an adjusted trial balance.
Answer c. Post adjusting journal entries, prepare adjusted trial balance, prepare financial statements
Explanation: The accounting cycle is an aggregate course of recognising, examining, and recording the accounting transactions of an organisation. It is a standard 8-step measure that starts when an exchange happens and finishes with its inclusion and consideration in the financial summaries.
- Prepare journal entries, analyse transactions, prepare an adjusted trial balance.
- Prepare adjusted trial balance, prepare closing entries, and prepare financial statements.
- Post adjusting journal entries, prepare adjusted trial balance, prepare financial statements.
- Post closing entries, prepare financial statements, prepare an adjusted trial balance.
Answer c. Post adjusting journal entries, prepare adjusted trial balance, prepare financial statements
Explanation: The accounting cycle is an aggregate course of recognising, examining, and recording the accounting transactions of an organisation. It is a standard 8-step measure that starts when an exchange happens and finishes with its inclusion and consideration in the financial summaries.
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