accounting cycle

The **accounting cycle** is a series of systematic steps followed by businesses to record, process, and report financial transactions during an accounting period. It ensures that financial data is accurately captured and transformed into meaningful financial statements, such as the balance sheet and income statement. Key stages of the accounting cycle include identifying transactions, journalizing entries, posting to ledgers, preparing trial balances, adjusting entries, and closing accounts. Understanding the accounting cycle is essential for maintaining accurate financial records and supporting effective decision-making.