Which process involves taking recorded transactions and turning them into financial reports?

The process that involves taking recorded transactions and turning them into financial reports is accounting. Accounting encompasses a variety of activities, including the systematic recording, analysis, and reporting of financial transactions. It goes beyond just maintaining records; it involves summarizing those records into meaningful financial statements, such as income statements, balance sheets, and cash flow statements. These financial reports are crucial for stakeholders to make informed decisions regarding the organization's financial health and performance.

While bookkeeping is closely related, it primarily focuses on the meticulous recording of financial transactions. Budgeting, on the other hand, involves planning future financial activities and is not directly about reporting past transactions. Auditing is the examination and verification of financial reports but does not involve the preparation of those reports. Thus, accounting is the correct term for the entire process of transforming recorded transactions into financial reports.