{"id":158205,"date":"2026-10-29T11:16:11","date_gmt":"2026-10-29T11:16:11","guid":{"rendered":"https:\/\/docs.daftra.com\/tutorial\/accounting-cycle-journal-entries-financial-statements\/"},"modified":"2026-11-11T15:39:11","modified_gmt":"2026-11-11T15:39:11","slug":"accounting-cycle-journal-entries-financial-statements","status":"publish","type":"tutorial","link":"https:\/\/docs.daftra.com\/en\/tutorial\/accounting-cycle-journal-entries-financial-statements\/","title":{"rendered":"The Accounting Cycle in the system: From Journal Entries to Financial Statements"},"content":{"rendered":"
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This guide explains the complete accounting cycle in the system, from setting up the Chart of Accounts and entering opening balances, through adding Clients and Suppliers and recording Journal Entries, to generating reports and financial statements and closing the period. For each step, you will see where to perform it, what happens in the system, and which report to review.<\/p>\n

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\ud83d\udec8<\/span><\/p>\n

Before you begin:<\/strong> Make sure the Accounting<\/strong> app is enabled in your account, and that your role includes the permissions for the Journal Entries and reports you need.<\/p>\n<\/div>\n

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Table of Contents<\/p>\n

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  1. Overview of the Accounting Cycle<\/strong><\/a><\/li>\n
  2. Step 1: Set Up the Chart of Accounts<\/strong><\/a><\/li>\n
  3. Step 2: Enter Opening Balances<\/strong><\/a><\/li>\n
  4. Step 3: Add Clients and Suppliers<\/strong><\/a><\/li>\n
  5. Step 4: Record Journal Entries<\/strong><\/a><\/li>\n
  6. Step 5: Post to the General Ledger<\/strong><\/a><\/li>\n
  7. Step 6: Daily and Monthly Reports<\/strong><\/a><\/li>\n
  8. Step 7: Financial Statements<\/strong><\/a><\/li>\n
  9. Step 8: Close the Financial Period<\/strong><\/a><\/li>\n
  10. Frequently Asked Questions<\/strong><\/a><\/li>\n<\/ol>\n<\/div>\n

    Overview of the Accounting Cycle<\/h2>\n\n\n\n\n\n\n\n\n\n\n\n
    Step<\/th>\nWhere to Perform It<\/th>\nResult<\/th>\n<\/tr>\n
    Set up the Chart of Accounts<\/td>\nAccounting<\/strong> > Chart of Accounts<\/strong><\/td>\nAccounts are ready for recording transactions.<\/td>\n<\/tr>\n
    Opening balances<\/td>\nClient, Supplier, and Inventory records, and Journal Entries<\/td>\nCorrect balances as of the start date.<\/td>\n<\/tr>\n
    Clients and Suppliers<\/td>\nClients<\/strong> and Purchases<\/strong><\/td>\nA sub-account is created automatically for each Client and Supplier.<\/td>\n<\/tr>\n
    Journal Entries<\/td>\nAutomatic from transactions, or manual from Journal Entries<\/strong><\/td>\nFinancial transactions are recorded.<\/td>\n<\/tr>\n
    Posting to the ledger<\/td>\nAutomatic when you save<\/td>\nAccount balances update immediately.<\/td>\n<\/tr>\n
    Reports<\/td>\nReports<\/strong> > Accounting Reports<\/strong><\/td>\nTrack transactions and balances.<\/td>\n<\/tr>\n
    Financial statements<\/td>\nIncome Statement<\/strong> and Balance Sheet<\/strong><\/td>\nBusiness results and financial position.<\/td>\n<\/tr>\n
    Period closing<\/td>\nFinancial Periods<\/strong><\/td>\nProtects the period from edits and carries forward the result.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    Step 1: Set Up the Chart of Accounts<\/h2>\n

    The Chart of Accounts<\/strong><\/a> comes preloaded with the main accounts: Assets, Liabilities, Equity, Revenue, and Expenses. Review it and add any main and sub accounts your business needs before you record transactions.<\/p>\n