The accounting period refers to the timespan – usually a one year period, in which a company produces a set of accounts. This will involve income, expenses and profits. The two main statements are:
- A profit and loss account – Income vs expenditure showing net profit (loss)
- Balance sheet – A list of the liabilities and assets of a firm
In the UK, the official tax year is April 6th to April 5th. This is often used as an account period as taxes have to be produced for profit in this period.