Bookkeeping and Accounting Cycle

The seven-step accounting cycle, a simple means of organizing and keeping track of financial transactions, accommodates the needs of both individuals and large corporations. Each time an item is purchased or sold, persons in charge of bookkeeping implement the first three steps of the cycle and pass on the information to the accountant who implements the last four steps. While an individual might hire an accountant to prepare financial statements, corporations often have a staff of bookkeepers and accountants to perform all seven tasks in the cycle.