The accounting cycle is pictured below. The first three steps are highlighted:

Step 1: Collect and verify source documents.

Step 2: Analyze each transaction.

Step 3: Journalize each transaction.

Collect and verify source documents INVOICE RECEIPT MEMORANDUM POST-CLOSING TRIAL BALANCE Prepare a post-closing trial balance Analyze each transaction ACCOUNT DEBIT CREDIT GENERAL JOURNAL ACCOUNT DEBIT CREDIT LEDGER Journalize and post closing entries Journalize each transaction GENERAL JOURNAL 7 INCOME STATEMENT STATEMENT OF CHANGES IN OWNER'S EQUITY BALANCE SHEET Prepare financial statements Post to the ledger 6 WORK SHEET Prepare a work sheet LEDGER 5 TRIAL BALANCE Prepare a trial balance