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Question
State four stages of Accounting cycle.
Short Note
Solution
- Recording Financial Transactions in Journal (Journalising): Financial transactions are recorded in the book of original entry i.e. journal.
- Posting in Ledger: The entries recorded in journal are transferred periodically to appropriate accounts in ledger.
- Trial Balance: The balances of various accounts appearing in ledger are transferred to trial balance.
- Income Statement: At the end of year an income statement is prepared from the trial balance.
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Accounting Cycle
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