Which type of accounting uses the first day of the calendar year as the beginning of its reporting period for tracking earnings?

• A. Managerial accounting
• B. Cost accounting
• C. Fiscal-year accounting
• D. Calendar-year accounting

Answer: (D)

Verified step by step guidance

1. Understand the concept of accounting periods: Accounting periods are specific time frames used to track and report financial information. These periods can vary depending on the type of accounting system used.
2. Learn about calendar-year accounting: Calendar-year accounting uses January 1st as the beginning of its reporting period and December 31st as the end. This aligns with the standard calendar year.
3. Differentiate calendar-year accounting from fiscal-year accounting: Fiscal-year accounting may start on any date and end 12 months later, depending on the organization's preference or regulatory requirements. Calendar-year accounting strictly follows the calendar year.
4. Recognize the purpose of calendar-year accounting: It is commonly used by individuals and businesses whose reporting aligns with the standard calendar year for simplicity and compliance with tax regulations.
5. Identify the correct answer: Based on the description provided, the type of accounting that uses the first day of the calendar year as the beginning of its reporting period is calendar-year accounting.