Accounting (ACCT 101 & ACCT 102)

Accounting Cycle

What is the accounting cycle?

The accounting cycle is one of the first core concepts you learn in accounting, because it serves as a guide for the accounting process as a whole. If nothing else, just remember that basic underlying idea of it is to identify, record, and process all of a company’s financial transactions—from when a transaction occurs, to its representation on the financial statements, to closing the accounts.

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Think of it as a workflow map that links together everything that happens with all the accounts, journal entries, T accounts, debits, and credits, and adjusting entries over a business period (e.g., a fiscal year).

Sometimes it helps to visualize the steps rather than just read about them, so below is an infographic summarizing the 8 basic steps of the accounting cycle. If you find it helpful, feel free to download it either using the down arrow in the PDF box, or using the link at the very bottom of the page.

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