Which step is NOT part of the accrual accounting cycle?

The accrual accounting cycle encompasses a series of steps that organizations follow to ensure that their financial records are accurate and up-to-date. The key steps typically include identifying transactions, posting to the general ledger, preparing a trial balance, adjusting entries, and preparing financial statements. The closing of accounts is specifically associated with the accounting cycle but applies only to temporary accounts that reset for the next accounting period.

Closing permanent accounts is not part of the accrual accounting cycle because these accounts, which include assets, liabilities, and equity, are not closed at the end of the accounting period. Instead, they carry their balances forward into the next period. The closing process primarily focuses on temporary accounts, such as revenues and expenses, which are reset to zero at the beginning of a new period to reflect the new operational results.

Therefore, the step that is not part of the accrual accounting cycle is closing permanent accounts, as this step relates more to how temporary accounts are managed rather than the accrual accounting procedures themselves.