The term "accounting period" is used to refer to the
A. time span during which taxes are paid to the inland revenue board B. budget period, usually one year, relied on by the accountant C. time span, usually one year, covered by financial statement D. period within which debtors are expected to settle accounts
Correct Answer: C
Explanation
The correct answer is: C. time span, usually one year, covered by financial statement
The term "accounting period" refers to the specific duration for which financial statements are prepared to report the financial performance and position of an entity. This period is usually one year, but it can also be shorter, such as a quarter or a month, depending on the reporting requirements.
Why not the other options? - A. time span during which taxes are paid to the inland revenue board: While taxes may be calculated based on the accounting period, the term specifically refers to the period for financial reporting, not the tax payment timeline. - B. budget period, usually one year, relied on by the accountant: The budget period is different from the accounting period. The budget period refers to the time for which financial plans are made, not necessarily the period covered by financial statements. - D. period within which debtors are expected to settle accounts: This describes a credit term or payment period, not the accounting period.
