What is the correct order of the steps in the accounting cycle?
1) Entries are made in the journal
2) A business transaction occurs
3) A trial balance is prepared
4) Entries are made in the ledger
A) 2, 4, 1, 3
B) 2, 1, 4, 3
C) 3, 2, 1, 4
D) 2, 4, 3, 1.

Question

Quizplus · Accepted Answer

The accounting cycle begins with a business transaction (2), followed by journal entries (1) to record the transaction, then ledger entries (4) to classify and group the transactions, and finally a trial balance (3) to ensure the debits and credits are equal. Therefore, the correct order is 2, 1, 4, 3. Choice B is the only option that has the correct order.

What Is the Correct Order of the Steps in the Accounting