Explanation should include the following steps:

  1. Collecting and verifying source documents.
  2. Analyzing each transaction.
  3. Journaling each transaction in the general journal.
  4. Posting transactions to the general ledger.
  5. Preparing a trial balance.
  6. Preparing a worksheet.
  7. Journaling and posting adjusting and closing entries.
  8. Preparing a post-closing trial balance.
  9. Preparing financial statements.