Commercial Applications
Answer
Three stages of the accounting cycle are:
Recording Financial Transactions in Journal (Journalising) — The first step in which financial transactions are recorded in the books of original entry, i.e., the journal, in chronological order.
Posting in Ledger — Entries recorded in the journal are transferred periodically to appropriate accounts in the ledger. All transactions of one nature are posted in one account, resulting in classification of transactions.
Trial Balance — The balances of various accounts in the ledger are transferred to the trial balance, which is a statement containing balances of all the ledger accounts. The total of debit balances must equal the total of credit balances.
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