Accounting period
Okay, let's pretend you have a piggy bank where you save your money. Now, every time you put in some money into your piggy bank, it's like a new chapter in your book. And when you take out some money from the piggy bank, that chapter ends.
So, just like your piggy bank, a company also has a piggy bank of its own called an "account." And just like you have chapters in your book, a company has different time periods to keep track of their money. These are called "accounting periods."
An accounting period is just a specific length of time, like a month or a year, where a company keeps track of all its money transactions. That means, in that time, they write down how much money they made, how much they spent, and how much they have left.
Just like the chapters in your book, the accounting periods help the company keep track of their money and see if they are making more than they spend. And when the accounting period ends, it's like closing the chapter of the book. A new accounting period starts right after that, just like starting a new chapter.
So just remember, an accounting period is when a company keeps track of their money for a specific time, like a chapter in a book, to see how much money they make and spend.
So, just like your piggy bank, a company also has a piggy bank of its own called an "account." And just like you have chapters in your book, a company has different time periods to keep track of their money. These are called "accounting periods."
An accounting period is just a specific length of time, like a month or a year, where a company keeps track of all its money transactions. That means, in that time, they write down how much money they made, how much they spent, and how much they have left.
Just like the chapters in your book, the accounting periods help the company keep track of their money and see if they are making more than they spend. And when the accounting period ends, it's like closing the chapter of the book. A new accounting period starts right after that, just like starting a new chapter.
So just remember, an accounting period is when a company keeps track of their money for a specific time, like a chapter in a book, to see how much money they make and spend.