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The accounting process follows a structured sequence of steps to ensure accurate financial reporting. After recording entries in the general journal, the process continues with the following steps:

1. Posting to the General Ledger – Transactions from the general journal are transferred to their respective accounts in the ledger.

2. Preparing an Unadjusted Trial Balance – A preliminary list of all ledger accounts and their balances is created to check if total debits equal total credits.

3. Making Adjusting Entries – At the end of the accounting period, adjustments are recorded to account for accruals, deferrals, and other necessary corrections.

4. Preparing an Adjusted Trial Balance – After adjustments, a revised trial balance is prepared to verify that debits and credits still match.

5. Creating Financial Statements – The adjusted trial balance is used to generate key financial statements, including the income statement, balance sheet, and cash flow statement.

6. Closing Entries – Temporary accounts (revenues, expenses, and dividends/drawings) are closed to retained earnings to prepare for the next accounting period.

7. Post-Closing Trial Balance – A final trial balance is prepared to ensure only permanent accounts remain open for the next period.

Each of these steps ensures that financial information is accurate and reliable for stakeholders.