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BUS 251

The accounting cycle, start to finish.

Twelve short steps on one small company's first month: every transaction from source document to journal to ledger, then the month end in order, from the trial balance and adjusting entries to the statements, closing and the worksheet. Then practise with worked solutions.

Part 1 · The big picture · Step 1 of 12

The accounting cycle: the same stages, in the same order, every period

During the month
Analyse each transaction
Step 2 of this tool
During the month, for every transaction
At the end of the month, once
First day of the next month, optional
The accounting cycle turns a month of business events into financial statements. Three stages repeat during the month for every transaction: analyse, journalize, post. Six happen at the end of the month, in a fixed order. We follow one new company, Bluefin Pool Care Ltd., through its first month, June 2026; every number in the next steps comes from that one month.
Try it: Tap each stage on the loop. Follow the chain: what one stage produces is exactly what the next one needs.
Stage1 of 10
AnalyseReverse
Needs
A source document: an invoice, receipt, deposit slip, contract or bank statement.
Produces
Which accounts change, up or down, and by how much.
Hands on to
Journalize turns the analysis into a journal entry.
At Bluefin in June
12 transactions in June, each with its document.
Stages 1 to 3 run again for every transaction, all month long. In June, Bluefin goes round them 12 times.
During the month: analyse → journalize → post
Every transaction, all month.
Month end: trial balance → adjust → adjusted trial balance → statements → close → post-closing trial balance
Once, on the last day, always in this order.
Then the next period starts with the permanent balances
Most companies close once a year. We close at the end of one month so the whole cycle fits on a small example.
Check yourself
Why must the adjusting entries come before the statements?
Practise

Practise the whole cycle

Every stage of the cycle, in order. Answer first, then check. Fresh numbers writes a new question each time, so you can drill any stage until it feels routine.

Score
0 / 0
Order of the cycleQuestion 1 of 19
Which list puts the end-of-period stages of the accounting cycle in the right order?

Midterm coming up and journal entries still feel shaky?

Bring your practice problems. We work through them together until every type feels routine.

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