What is a fiscal year?

• A. The Calendar Year
• B. A 12-month period used to gather an organization's financial information
• C. A Three-month Audit Period
• D. A Rolling 12-month Window Based on Project Cycles

Answer: (B)

A fiscal year is a 12-month period used to gather and report an organization's financial information. It may start in any month, not necessarily January, and is chosen for budgeting, reporting, and tax purposes. This differs from the calendar year, which runs January through December. It’s also distinct from a three-month audit period (a quarter) and from a rolling 12-month window, which shifts as time moves. Using a fixed 12-month fiscal year allows consistent comparisons of financial performance across periods.