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Completing the Accounting Cycle

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Name the steps in completing the accounting cycle and explain how they impact the financial statements. What happens is a step is missed? Explain.

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The steps in the accounting cycle include:
1. record the transaction
2. create a journal entry
3. post the journal entry to the individual accounts
4. prepare the trial balance of the balances in the accounts
5. review for adjustments needed
6. propose and post adjusting journal entries
7. create financial statements from adjusted trial balance
8. close out the nominal accounts to retained earnings

Each step provides a vital step in ...

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