Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 33 - No. 33)
Why is the accounting year often different than the calendar year for a business?
To align with the company's fiscal cycle or industry practices.
To reduce tax obligations.
To simplify the bookkeeping process.
To confuse competitors.
Explanation
Businesses may have an accounting year that differs from the calendar year to coincide with a key period of their business cycle (e.g., harvest seasons) or align with tax considerations. The accounting year often starts on the first day of the month, which usually begins at the first of January.
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