Final answer:
Option B correctly lists the steps of the accounting cycle in their proper order, though it is important to note that some steps like preparing financial statements and the trial balance are not explicitly stated but occur in the process.
Step-by-step explanation:
The accounting cycle is the collective process of identifying, analyzing, and recording the accounting events of a company. It is a standard practice that ensures the business's financial statements are accurate and in compliance with accounting principles. Let's look at the correct order of steps within the accounting cycle among the options provided.
- Journalize the transactions - Recording transactions in the general journal.
- Post transactions - Transferring the journal entries to the general ledger.
- Prepare a trial balance - Ensuring that debits equal credits.
- Journalize and post adjusting entries - Adjusting the accounts to reflect accurate balances for the period.
- Prepare an adjusted trial balance - Checking that debits still equal credits after adjustments.
- Prepare financial statements - Using the adjusted trial balance to prepare the income statement, statement of retained earnings, balance sheet, and statement of cash flows.
- Journalize and post closing entries - Clearing out temporary accounts (revenues, expenses, dividends) to retained earnings.
- Prepare a post-closing trial balance - Final check to ensure debits and credits are equal after closing entries.
Looking at the options, Option B lists the steps of the accounting cycle in their correct order: Journalize the transactions, post the adjusting entries, journalize the closing entries. It is important to note that preparing financial statements and the trial balance would come between posting adjusting entries and journalizing the closing entries, although they are not explicitly listed in this option.