Accounting periods are a fixed period of time in which financial information is reported or is a timeframe during which a transaction occurs.

Now it’s time to play our favorite game in this article: How long is an accounting period?

    • A: A month
    • B: A quarter
    • C: A Year

And that’s right; it’s the secret option D: All of the above.

Typically, the actual length will be set by the organization with respect to its fiscal year. Yes, much like everything else, this, too, revolves around the fiscal year.

Accounting periods can help your accountants/financial department analyze data between specific points in time, compare periods between one another, and report on performance to their higher-ups so you can finally say your annual fall event is becoming completely stale and unlikeable by all parties involved. Seriously, change your yearly fall event.

On a more serious note, this analysis can help the company decide what gives the best return on investment. With accounting periods, they can discover what time period is best to spend money on certain departments of the business. Perhaps spending money on marketing is most effective during the holiday season or in election years. Perhaps spending on research and development is best in the summers.