The transaction is recorded chronologically in the journal. All the transactions are recorded through journal entries. The third step is to post each journal
entry to the appropriate ledger accounts. The journalized transactions are posted to the account that it impacts. The accounting cycle requires summarizing of the entries pertaining to a particular period in a trial balance. A trial balance is essentially a list of all accounts and provides an overview of the various types of financial transactions entered into by any organization during a period. After preparation of trial balance, the next step is recording the adjustments like adjusting prepaid/outstanding expenses, recording advance/accrued income, etc. The purpose of adjusting entries is to match incomes with expense during the accounting period. One of the most important steps of the accounting process involve preparing the financial statements. Final step of the accounting process involves closing the books for the revenue and expense accounts which leads to begin again the entire cycle with zero balances.