The first step of the accounting cycle is
A) recording journal entries.
B) posting to the ledger.
C) preparing a trial balance.
D) analyzing business transactions.

Question

Quizplus · Accepted Answer

The first step of the accounting cycle is analyzing business transactions to determine their financial effect on the company. This involves identifying the accounts affected by the transaction and identifying whether it increases or decreases those accounts. Only after this analysis can journal entries be recorded and posted to the ledger, which leads to the preparation of a trial balance.

The First Step of the Accounting Cycle Is