Explanation should include the following steps:

  1. Collect and verify source documents.
  2. Analyze each transaction.
  3. Journalize each transaction in the appropriate journal.
  4. Post transactions to the all ledgers.
  5. Prepare a schedule of accounts receivable and accounts payable.
  6. Prepare a trial balance.
  7. Prepare a worksheet.
  8. Journalize and post adjusting and closing entries.
  9. Prepare a post-closing trial balance.
  10. Prepare financial statements.