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\begin{array}{l}\phantom{23)}\phantom{1}\\23\overline{)161}\\\end{array}
Use the 1^{st} digit 1 from dividend 161
\begin{array}{l}\phantom{23)}0\phantom{2}\\23\overline{)161}\\\end{array}
Since 1 is less than 23, use the next digit 6 from dividend 161 and add 0 to the quotient
\begin{array}{l}\phantom{23)}0\phantom{3}\\23\overline{)161}\\\end{array}
Use the 2^{nd} digit 6 from dividend 161
\begin{array}{l}\phantom{23)}00\phantom{4}\\23\overline{)161}\\\end{array}
Since 16 is less than 23, use the next digit 1 from dividend 161 and add 0 to the quotient
\begin{array}{l}\phantom{23)}00\phantom{5}\\23\overline{)161}\\\end{array}
Use the 3^{rd} digit 1 from dividend 161
\begin{array}{l}\phantom{23)}007\phantom{6}\\23\overline{)161}\\\phantom{23)}\underline{\phantom{}161\phantom{}}\\\phantom{23)999}0\\\end{array}
Find closest multiple of 23 to 161. We see that 7 \times 23 = 161 is the nearest. Now subtract 161 from 161 to get reminder 0. Add 7 to quotient.
\text{Quotient: }7 \text{Reminder: }0
Since 0 is less than 23, stop the division. The reminder is 0. The topmost line 007 is the quotient. Remove all zeros at the start of the quotient to get the actual quotient 7.