Accounting Period

Accounting period can be defined as the time frame or time period in which the accounting and financial events of a business take place. For most of the companies the accounting period is a time span of one year or a quarter however it varies from business to business and company to company. The accounting period has a time span that is generically similar and encompassing the same amount of time however the ending and the starting time of the accounting period can be drastically different depending on various kinds and types of businesses. However this must be kept in mind that the starting and the ending dates of the accounting period can be drastically different depending upon the activities within the business. It is not mandatory for all the companies to start their business year in January likewise it is not necessary to end the business and accounting year in December.

Although accounting and financial periods may vary from the ending to starting dates however the time span of each accounting period must be consistent and maintained throughout the accounting procedure of the company. If an accounting period of the company is ending at 30 June the next accounting period must start from the 1^st July of the same year. With the help of the consistent accounting period of the company the investors and third credit parties can compare apples to apples and can make their decisions depending upon the performance during a credit period of the company.