We know the going concern concept assumes that the business will continue for a long period, almost indefinitely. But, the businessmen cannot postpone the preparation of financial statements indefinitely. Therefore, he prepares them periodically to find out the profit or loss and financial position of the business. This will also enable other interested parties such owners, investors, creditors, tax authorities to make periodic assessment of its performance. So, the life of the business enterprise is divided into what are called ‘accounting periods', Profit and loss and the financial position at the end of each such accounting period is regularly assessed. Conventionally, duration of the accounting period is twelve months. It is called an 'accounting year’. Accounting year cap be a calendar year i.e., January 1 to December 31 or any other period of twelve months, say, April 1 to March 31 or Dewali to Dewali. Normally, the final accounts are prepared at the end of each accounting year. The Profit and Loss Account is prepared for the year so as to ascertain the profit earned or loss incurred during that year, and the Balance Sheet is prepared as on that date. However, for internal management purposes, accounts can be prepared even for shorter periods, say monthly, quarterly or half yearly.