The first required step in the accounting cycle is
A) reversing entries.
B) journalizing transactions in the book of original entry.
C) analyzing transactions.
D) posting transactions.

Question

Quizplus · Accepted Answer

The first required step in the accounting cycle is analyzing transactions. This involves examining the source documents and identifying the accounts and amounts involved in each transaction. This information is then used to determine the appropriate journal entry to record the transaction. Only after analyzing the transactions can they be journalized in the book of original entry, posted to the ledger, and eventually used to prepare financial statements. Reversing entries are optional, and are typically only used if accruals or deferrals were recorded in the previous period.

The First Required Step in the Accounting Cycle Is