Question

Short Summary - Determine the different accounting periods and accounting methods allowed for tax purposes.

Answer 1

Every Tax payers ( individual, business entities,etc, ) must future taxable income for an annual accounting period called a tax year . The calacale year is the most common tax year.other tax year include a fiscal year and a short tax year

Ecah taxpayer must use a consistent Accounting method,whi wh is a set of rules for determining when to report income and expenses.The most commonly used Accounting method are cash method and accrual method

Under cash method,you generally report income in the tax year you receive it, and deduct expenses in the tax year in which you pay the expenses

Under accrual method,you generally report income in the tax year you earn it regardless of when payment is received,you deduct expenses in the tax year you incurred them, regardless of when payment is made.

You can use the following tax years

A calendar year or;

A fiscal year ( including a 52-53 week tax year)