Accounting Period
An Accounting Period is a specific time frame used by businesses to prepare their financial statements. This period can be monthly, quarterly, or annually, depending on the company's reporting needs. By dividing financial activities into these periods, businesses can track their performance and make informed decisions.
During each accounting period, all financial transactions are recorded, allowing for a clear picture of income, expenses, and overall profitability. This practice is essential for compliance with accounting standards and helps stakeholders, such as investors and management, assess the company's financial health over time.