Final answer:
The bookkeeping cycle begins with the recording of financial transactions in Special Journals, which are then posted to the General Ledger and used to prepare financial statements.
Step-by-step explanation:
The bookkeeping cycle starts with a financial transaction that is initially recorded in Special Journals. The process begins with the documentation of transactions like sales, purchases, receipts, and payments in these journals, tailored to the specific types of transactions to which they relate. From these special journals, the transactions are then periodically summarized and posted to the General Ledger, which acts as a master set of accounts that provide the balance of each account that will be used to prepare financial statements. It is important to note that the Trial Balance is a step that comes later in the accounting cycle, where the ledger balances are listed to check that the debits equal the credits, and a Cash Journal is a specific type of special journal that records all transactions involving cash.