Accounting Cycle

Definition

The complete sequence of steps a company takes to record, process, and report financial transactions during one accounting period. It's like the orbit of the Earth: it starts, completes a full rotation, and then starts again.

Related Terms

Adjusting Entries

Journal entries made at the end of an accounting period to update accounts before preparing financial statements. These ensure revenues are recorded when earned and expenses when incurred. Common examples: accrued wages, prepaid insurance expiring, depreciation.

Learn More About Accounting

Explore our free lessons and practice labs to master accounting concepts.

Browse Lessons View All Terms