Which process involves keeping records of all transactions during a specific accounting period?

The accounting cycle is the process that encompasses the complete series of steps taken to record, classify, and summarize all financial transactions over a specific accounting period. This cycle begins with the identification of transactions and culminates in the creation of financial statements. It typically includes phases such as journalizing transactions, posting to the ledger, preparing trial balances, and adjusting entries before finally completing the financial reports.

The accounting cycle is essential because it ensures that all financial activities are systematically recorded and can be accurately analyzed. This process is fundamental for businesses to track their financial performance and ensure compliance with accounting principles. By maintaining meticulous records throughout this cycle, organizations can produce reliable financial statements that reflect their economic activities for stakeholders.

In contrast, the other options serve different purposes within financial operations. Financial reporting relates to the presentation of financial data in a structured format to convey an entity's financial status but does not encompass the entire process of recording transactions. Auditing is the examination of financial records and statements to verify their accuracy and compliance, while taxation pertains to the regulatory obligations related to income and other forms of tax, which also do not focus on the recording process itself.