📘 How do you run a full accounting cycle?

What you’ll learn

1. Framing the Project: What You Will Build and WhyDefine the scope of a small-business accounting project and the framework of standards and assumptions that will govern every decision you make in it.This lesson sets up the guided project: you will keep a complete set of books for one fictional small business over a short period and produce its core financial statements. To do that credibly you must work within the same framework real accountants use — the four basic financial statements, the underlying assumptions (entity, going concern, monetary unit, periodicity), and the standards (U.S. GAAP, set by the FASB) that make statements comparable. Getting this scaffolding right now prevents rework later, because every journal entry and report you build will be justified by reference to it.
2. The Accounting Equation and Double-Entry LogicUse the accounting equation and the rules of debits and credits to determine, for any transaction, which accounts change and by how much.Every entry in your project rests on one identity: Assets = Liabilities + Equity. Double-entry bookkeeping enforces that identity by requiring each transaction to be recorded with equal debits and credits, so the equation always stays balanced and errors surface immediately. This lesson teaches the normal-balance rules account by account so you can translate a plain-English event into a correct journal entry, the skill you will use dozens of times when you build the artifact.
3. Accrual Accounting and the Recognition PrinciplesApply accrual accounting, the revenue recognition principle, and the matching (expense recognition) principle to decide when each transaction in your project should hit the books.Recording the right amount is only half the job; recording it in the right period is the other half. Accrual accounting — required by GAAP — recognizes revenue when it is earned and expenses when they are incurred, regardless of when cash changes hands, which is fundamentally different from cash-basis accounting. This lesson explains the revenue recognition and matching principles and introduces the adjusting entries (accruals and deferrals) you will need so that your project's statements faithfully reflect the period's performance.
4. The Accounting Cycle: From Transaction to Trial BalanceWalk a transaction through the steps of the accounting cycle — journalizing, posting, and trial balance — and use the trial balance to catch errors before building statements.The accounting cycle is the repeatable sequence that turns raw business events into reliable financial statements. In this lesson you practice the mechanical heart of it: journalizing transactions, posting them to ledger accounts, and preparing a trial balance to confirm that debits equal credits. You will also learn what a trial balance can and cannot catch, so you treat it as a checkpoint rather than a guarantee of correctness as you build the project's books.
5. From Adjusted Trial Balance to Financial StatementsConvert an adjusted trial balance into the income statement, statement of owner's equity, and balance sheet, and close the temporary accounts to prepare for the next period.Once the adjusting entries are posted and the adjusted trial balance is in hand, the financial statements almost write themselves — if you know the order and the linkages. This lesson assembles the income statement, statement of owner's equity, and classified balance sheet, and then closes the temporary accounts so the next period starts clean. These are the central outputs your applied project must produce, so the mechanics here translate directly into your artifact.
6. Build the Artifact: Your Complete Accounting ProjectAssemble a full set of books for a small business — from chart of accounts through closed financials and ratio interpretation — as your assessed applied project.This final lesson is the build. You will pull together everything from the prior lessons to produce a complete, internally consistent set of books for one fictional small business over one period, ending in financial statements and a short interpretation. The clips below are an ordered, checklist-style guide you can follow step by step; the goal is an artifact that is mechanically correct (it balances), conceptually correct (it obeys GAAP recognition principles), and meaningfully interpreted (you can explain what the numbers say).

Questions this course answers

Grounded in trusted sources

• Financial Accounting Standards Board (FASB), About GAAP — https://www.fasb.org
• SEC, Beginners’ Guide to Financial Statements
• Kieso et al., Intermediate Accounting (accrual recognition and the accounting cycle)
• AICPA / foundational double-entry and trial-balance practice materials

Every Wunder lesson is built from real, reputable sources — never invented.

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