Question

Which of the following is the time span into which the total life of a business is divided for the purpose of preparation of financial statements?

• A. Fiscal Year
• B. Calendar Year
• C. Accounting Period
• D. Accrual Period

Answer 1

The correct option is C

Accounting Period

An accounting period is the span of time covered by a set of financial statements. This period defines the time range over which business transactions are accumulated into financial statements, and is needed by investors so that they can compare the results of successive time periods.