Which of the following statements is TRUE of the accounting cycle?
A) It takes place only at the end of an accounting period.
B) It involves preparation of adjusting entries after the closing entries.
C) It ignores the beginning balances of accounts.
D) It is a process by which financial statements for a period are produced.

Question

Quizplus · Accepted Answer

The accounting cycle is a process by which financial statements for a period (such as a month or a year) are produced. It involves a series of steps that begin with analyzing and recording business transactions and end with the preparation of financial statements. The cycle is typically repeated for each accounting period. Options A, B, and C are incorrect as the accounting cycle is not limited to the end of an accounting period, involves preparation of adjusting entries before closing entries, and takes into consideration the beginning balances of accounts.

Which of the Following Statements Is TRUE of the Accounting