ACCOUNTING Lecture Notes - Calender
Document Summary
All the transactions are recorded in the books of accounts on the assumption that profits on these transactions are to be ascertained for a specified period. Thus, this concept requires that a balance sheet and profit and loss account should be prepared at regular intervals. This is necessary for different purposes like, calculation of profit, ascertaining financical position, tax computation etc. Further, this concept assumes that, indefinite life of business is divided into parts. It may be of one year, six months, three months, one month, etc. But usually one year is taken as one accounting period which may be a calender year or a financial year. Year that begins from 1st of january and ends on 31st of december, is known as calendar year. The year that begins from 1st of april and ends on 31st of. March of the following year, is known as financial year.
