The Difference Between the Accounting Process and the Accounting Cycle

question 43

Multiple Choice

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.

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Definitions:

Receivables Accounting

The process of managing money that is owed to a company for goods or services that have been delivered but not yet paid for.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) for the preparation of public company financial statements globally.

GAAP

Commonly adhered to accounting rules and standards for financial reporting, known as Generally Accepted Accounting Principles.

Merchandise On Account

Goods that have been purchased but not yet paid for, often resulting in an accounts payable for the buyer.