Define "accounting cycle."

The accounting cycle refers to the systematic series of steps that accountants follow to ensure that all financial transactions are properly identified, analyzed, recorded, and summarized into financial statements. This process typically begins with the initial recognition of transactions and continues through to their summarization in financial statements, allowing for an organized approach to managing a company's financial data.

The correct answer highlights the comprehensive nature of the accounting cycle, which includes critical tasks such as journalizing transactions, posting them to the ledger, preparing trial balances, and ultimately generating financial statements. This structured process ensures accuracy and consistency in financial reporting, which is essential for decision-making by management and stakeholders.

The other options do not encapsulate the full scope of the accounting cycle. While one option mentions financial ratios, it fails to represent the detailed process involved in financial transaction management. Another option refers to financial statements, which are an outcome of the accounting cycle rather than a definition of it. Lastly, the option concerning a cycle to determine a company's expenses overlooks the broader perspective of the various transactions that comprise the entire accounting process. Understanding the accounting cycle is fundamental for anyone involved in financial accounting, as it lays the groundwork for effective financial management and reporting.