Question

what do u mean by accounting period concept . in sentence​

Answer 1

ANSWER :

❒ Accounting Period Concept :-

• ➬ According to Accounting Period/Periodicity Concept, the life of the business is divided into appropriate segment or period for studying the result shown by the business after its segment or period. This is because, though the life of the business is considered to be indefinite, it would not be helpful in taking corrective steps to the appropriate time by measuring the income and studying the financial position of the business after a very long period.

• ➬ Accounting period refers to the period of time at the end of books of account of business entity are to be closed and financial statement are to be prepared. As per Accounting Period Concept, at the end of each accounting period, an Income statement and a balance sheet are prepared by a business. The Income Statement discloses a profit or loss made by the business during the particular accounting period, Again the Balance Sheet depicts the financial position of the business as on the last day of the accounting period.

• ➬ Accounting Period Concept has received legal sanctions from the Indian Income Tax laws under which books of accounts are required to be closed by a business entity on 31st March every year.