The difference between the accounting process and the accounting cycle is
A) the accounting process results in the preparation of financial statements, whereas the accounting cycle is concerned with recording business transactions.
B) the accounting cycle represents the steps taken to accomplish the accounting process.
C) the accounting process represents the steps taken to accomplish the accounting cycle.
D) merely semantic, because both concepts refer to the same thing.

Question

Quizplus · Accepted Answer

The accounting process is the overall process of recording and summarizing business transactions to provide financial information for decision making. The accounting cycle, on the other hand, refers to the specific steps taken in the accounting process to ensure accuracy and completeness of financial information. Therefore, the accounting cycle is a subset of the accounting process. Choice A is incorrect, as the accounting process includes both recording of business transactions and preparation of financial statements. Choice C is incorrect, as it implies the reverse relationship between the two concepts. Choice D is incorrect, as the two concepts are distinct and serve different purposes.

The Difference Between the Accounting Process and the Accounting Cycle