In which order do these steps in the accounting cycle occur?
I Prepare financial statements
Ii Prepare reversing entries
Iii Prepare adjusting entries
Iv Prepare closing entries
V Prepare an adjusted trial balance
A) iii, v, i, iv, ii
B) v, iii, iv, i, ii
C) iii, v, iv, ii, i
D) v, iii, i, ii, iv

Question

Quizplus · Accepted Answer

The correct order is: Prepare adjusting entries (iii), Prepare an adjusted trial balance (v), Prepare financial statements (i), Prepare closing entries (iv), and finally Prepare reversing entries (ii). This sequence follows the logical flow of the accounting cycle, starting from adjusting entries to account for accruals and deferrals, to preparing the adjusted trial balance, then the financial statements, followed by closing entries to close temporary accounts, and finally, if necessary, preparing reversing entries at the start of the new period.

In Which Order Do These Steps in the Accounting Cycle