Question

The five major steps in the accounting cycle include all of the following except?

1) Prepare and post closing entries.
2) Prepare the financial statements.
3) Prepare and post adjusting entries.
4) Prepare reversing entries.

Answer 1

The five major steps in the accounting cycle do not include preparing reversing entries. Instead, they consist of analyzing and posting transactions, posting to ledger accounts, preparing and posting adjusting entries, preparing financial statements, and posting closing entries.

Step-by-step explanation:

The correct answer to the question, "The five major steps in the accounting cycle include all of the following except?" is option 4) Prepare reversing entries. The five major steps in the accounting cycle typically include:

1. Analyzing and recording transactions via journal entries.
2. Posting these journal entries to ledger accounts.
3. Prepare and post adjusting entries at the end of the period.
4. Prepare the financial statements.
5. Prepare and post closing entries to reset the balances of temporary accounts.

Reversing entries are an optional step and usually done at the beginning of the next accounting period, not considered one of the major steps of the accounting cycle.