An accounting period is a specific period of time used for performing, combining, and analyzing accounting tasks.
It can be a week, month, quarter, calendar year, or fiscal year. The purpose of an accounting period is to help potential shareholders evaluate a company's performance by examining its financial statements, which are prepared based on a fixed accounting period.
For instance, a company may have an accounting period that covers the calendar year, in which case its accounting period would run from January 1 to December 31 of each year. Another company might have an accounting period that covers the fiscal year, which could run from April 1 to March 31 of the following year.
The specific accounting period used by a company is usually determined by the company itself, but it may also be determined by regulatory requirements or other factors.
