Which statement about a fiscal year is true?

• A. A calendar year
• B. A 12-month period that can start in any month
• C. A 12-month period used for budgeting
• D. A 12-month period consisting of consecutive months

Answer: (D)

A fiscal year is a 12-month period used for financial reporting that does not have to follow the calendar year. The essential idea is that it covers twelve consecutive months in one continuous block. Describing it as a 12-month period consisting of consecutive months captures this core idea precisely. Saying it’s a calendar year would force it to January through December, which isn’t required. While a fiscal year can start in any month in practice, that alone doesn’t emphasize the important point that the year is a continuous 12-month span. And budgeting is a common use, but that purpose doesn’t define a fiscal year; the defining trait is the uninterrupted 12-month period.