The first step in the recording process is to

A) prepare financial statements.
B) analyze each transaction for its effect on the accounts.
C) post to a journal.
D) prepare a trial balance.

Before any information can be recorded, it must be analyzed in terms of its impact on the accounts. This involves determining which accounts will be affected by the transaction, and whether the transaction will increase or decrease the balance in each account. Once this analysis is complete, the information can then be recorded in a journal. Preparation of financial statements and trial balance comes much later in the recording process.