Which step in the accounting process involves grouping similar transactions?

The accounting process includes several critical steps, one of which is classification. This step is essential for organizing financial transactions in a way that makes them easier to understand and analyze. When you classify transactions, you group similar items together based on common characteristics, such as type of expense or income.

For example, all advertising expenses can be classified together, which allows for a clearer view of total advertising costs when evaluating the overall financial performance of a property. This classification facilitates better reporting and can assist property managers in making informed decisions regarding budgeting and financial planning.

In contrast, recording involves the initial documentation of transactions, summarizing focuses on aggregating classified data into financial statements, and interpreting is about analyzing that summarized data to draw conclusions about the financial status of a business. Each of these steps serves a unique purpose, but classification specifically addresses the organization of similar transactions, which is why it stands out as the correct answer.