The Accounting Period
All accounts are summarized for a particular period. The duration for summarization of accounts is based on the discretion of the businesspersons; they can summarize the accounts once a month, a quarter, or a year. Generally, most businesses summarize (close) the accounts annually.
The twelve-month accounting period is called a fiscal year. Businesses decide the fiscal year based on the nature of their businesses. Many businesses follow January 1st to December 31st – the calendar year. Department stores follow February 1st to January 31st of the following year. Education institutions follow July 1st to June 30th of following year.
