Question

Put the following steps from the accounting cycle in order, including any missing steps and omitting any that are not steps in the accounting cycle. Prepare an end-of-period spreadsheet, post transactions to the ledger, prepare financial statements, prepare a post-closing trial balance, calculate ratios to analyze the financial statements, and journalize and post the closing entries.

Answer 1

The accounting cycle involves a series of steps that need to be followed in order, including journalizing transactions, posting to the ledger, preparing trial balances, making adjustments, preparing financial statements, and closing entries. Calculating ratios is not a formal part of the cycle but is used for analysis afterwards.

Step-by-step explanation:

Correct Order of the Accounting Cycle Steps

The accounting cycle consists of a series of steps that are followed in a particular order to ensure the accuracy and completeness of financial accounting records. Here is the correct sequence for the steps mentioned in your question, including the missing steps and omitting the one that is not a formal part of the accounting cycle:

1. Analyze and record transactions in the journal.
2. Post transactions to the ledger.
3. Prepare an end-of-period spreadsheet (often called a trial balance).
4. Make adjusting entries.
5. Prepare adjusted trial balance.
6. Prepare financial statements.
7. Journalize and post closing entries.
8. Prepare a post-closing trial balance.

It should be noted that calculating ratios to analyze the financial statements is indeed an important aspect of the accounting process, but it is not a formal step in the accounting cycle itself; rather, it is typically done as part of the analysis after the financial statements have been prepared.