You are required by the IRS to select your accounting period for reporting profit and loss. For IRS purposes, a “tax year” is an annual specified period of time for keeping your business records and reporting income and expenses.
Two methods used for an accounting period and approved by the IRs are.
- A Calendar year – 12 consecutive months beginning January 1 and ending December 31.
- A fiscal year’ which does not start on Jan1 and necessarily end on Dec31.
For most small businesses, their accounting period will be based on the calendar year, 12 consecutive months beginning January 1 and ending December 31.
In this tutorial I will show you how to change the accounting period if you need too. By default GnuCash accounting period is set to display your records based on a standard year accounting period, based on the current year you are in.