Asked by Elaine Burnside on Jun 04, 2024
Verified
The 12-month period that ends when a company's sales activities are at their lowest level is called the:
A) Fiscal year.
B) Calendar year.
C) Natural business year.
D) Accounting period.
E) Interim period.
Natural Business Year
A fiscal year that ends when a business's sales activities are at their lowest point, facilitating easier inventory and activity analysis.
12-month Period
A 12-month period typically refers to a full year, used in financial reporting and analysis to compare performance or changes over the span of a year.
- Explain the concepts pertaining to the accounting cycle, including fiscal year and natural business year, and their significance in financial disclosures.
Verified Answer
ZK
Zybrea KnightJun 07, 2024
Final Answer :
C
Explanation :
The natural business year is defined as the 12-month period that ends when a company's sales activities have reached their lowest point. This cycle is often unique to each individual company and can be affected by factors such as seasonality, cyclical trends, and economic conditions. The other options (fiscal year, calendar year, accounting period, interim period) are defined by either a predetermined fixed-length period, or a period that is used for financial reporting purposes.
Learning Objectives
- Explain the concepts pertaining to the accounting cycle, including fiscal year and natural business year, and their significance in financial disclosures.