The accounting cycle is a structured, systematic process of identifying, recording, classifying, and summarizing all of a business's financial transactions over a specific period. It is a fundamental procedure that ensures the financial statements produced at the end of the period are accurate, consistent, and compliant with accounting standards.

Think of it as the complete life-cycle of every dollar that enters or leaves a company—from the initial sale or purchase to its final representation on the financial reports. This cycle is typically repeated monthly, quarterly, or annually, establishing a predictable routine for maintaining healthy financial records.