Copy of Copy of 10 Steps Accounting Cycle 1

By taim.tyriek | Updated: Nov. 7, 2024, 12:30 p.m.

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5.   Adjusted Entries
Adjusting entries are made to adjust the revenue and expense accounts to make them match with the actual period in which they happen. 
It is because the company implements the accrual basis so we need to make it more specific as to whether the nominal we gathered. 
Reflects the actual nominal based on the period for which it’s recognized.
X corp
Adjusted Entries
31 December 2022
Date
Account
Debit
Credit
General Ledger
Date
Account
Debit
Credit
Ref.
6. Adjusted Trial Balance
It is stated as adjusted trial balance that include all accounts balance after adjusting entry.
X corp
Adjusted Entries
31 December 2022
Date
Account
Debit
Credit
General Ledger
Date
Account
Debit
Credit
Ref.
General Ledger
Date
Account
Debit
Credit
Ref.
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7. Financial Statements
Financial statements are used to inform the company’s financial condition for stakeholders in order to make business decision making.
Income Statement
Statement of Changes in Equity
Financial Position Statement
Statement of Cash Flows
Note to Financial Statement
8.   Closing Entries
This step requires to close all the company’s nominal accounts, also known as revenue and expenses account.
It means that all the accounts that related to income statement will have a zero balance at the end of accounting period and at the beginning of next period.
It is because all the accounts have been closed. Only real accounts like assets, liabilities and equities have balance at the beginning of next period.
9. Post-Closing Trial Balance
List of all accounts which are
Assset
Liabilities
Equity
Revenue
Expense
After closing the income and expense accounts, we need to update the list after closing the general ledger which will eventually affect the balance of each ledger.
The balances are represented in post-closing trial balance which will have zero balance for revenue and expenses accounts.

10. Reversing Entries
The reversing entry is the reverse record of several accounts which have been adjusted.
The several account that is meant are only for accrued revenue and expenses.

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