The time frame in which a transaction occurs or during which financial information is presented in a report. The accounting period can be a month, a quarter or a year.
Usually, the accounting period is defined with respect to an organization’s fiscal year. Fiscal year refers to one year’s worth of accounting activity and can be any 12-month period throughout the year, such as June 1st to May 31st or October 1st through September 30th.
Why is an accounting period important? You, your accountant, and banker use your accounting data, aggregated by accounting period into financial statements, to analyze your business’s performance.