Accounting Period Concept

Though the life period of the business is longer in span, which is classified into the
operating periods which are smaller in duration. The accounting period may be either
calendar year of Jan-Dec or fiscal year of April-Mar. The operating periods are not
equivalent among the trading firms, which means that the operating period of one firm Financial Accounting may be shorter than the other one. The ultimate aim of the concept is to nullify the
deviations of the operating periods of various traders in the trading practice.
According to the Companies Act, 1956, the accounting period should not exceed more
than 15 months.

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