Accounting CycleThe business should record:
- All cash sales.
- All purchases.
- Anything that's measurable, relevant, or reliable.
- All events:
- External transactions: are between the entity and its environment, such \s exchanges with another company or a change in the cost of goods your business purchases.
- Internal transactions: are exchanges that occur within the organization.
- External transactions: are between the entity and its environment, such \s exchanges with another company or a change in the cost of goods your business purchases.
- Analyze and record transactions
- Post transactions to the ledger
- Prepare an unadjusted trial balance
- Prepare adjusting entries at the end of the period
- Prepare an adjusted trial balance
- Prepare financial statements