Accounting Periods and Methods
Bestaah Ecommerce Website:
Enjoy free shipping to shop for affordable high quality plus size maternity dresses!
Never compromise style for price or durability! Get them all with
our 8 items of large size maternity dresses.
Each taxpayer (business or individual) must
figure taxable income on an annual accounting
period called a tax year. The calendar year is
the most common tax year. Other tax years are a
fiscal year and a short tax year.
Each taxpayer must also use a consistent accounting method, which is a
set of rules for determining when to report income and expenses. The most
commonly used accounting methods are the cash method and an accrual method.
Under the cash method, you generally report income in the tax year you
receive it and deduct expenses in the tax year you pay them. Under an
accrual method, you generally report income in the tax year you earn it,
regardless of when payment is received, and deduct expenses in the tax year
you incur them, regardless of when payment is made.
For a complete discussion refer to
Accounting Periods and Methods.