Accounting cycle definition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. Accounting cycle can be defined as: Recurring steps performed each accounting period, starting with analyzing transactions and continuing through the post-closing trial balance (or revising entries). The accounting cycle represents the entire accounting process, the accounting cycle starting with the compiling of data from financial transaction, often using journal entries or forms that generate the posting of journal entry accounts. At the end of the period the accounting cycle will include adjusting entries, entries that adjust the unadjusted trial balance to the adjusted trail balance. The third step in the adjusting process is to use the adjusted trial balance to make the financial statements. The forth step in the adjusting process can be the closing out of the temporary accounts and there is an optional step on the accounting cycle of reversing entries to prepare financial statements for the next accounting cycle, the accounting cycle then repeating.
