An accounting period is the timeframe in which a transaction occurs or during which financial information is presented in a report. It can be a month, quarter, or a year.
Usually, the accounting period is defined with respect to an organisation’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 1 June to 31 May, or 1 October through 30 September.
Why is an accounting period important? You, your accountant, and banker use your accounting data, aggregated by accounting period into financial statements, to analyse your business’s performance.