The basic concepts related to P & L Account are
A)Realization Concept
B)Matching Concept
C)Cost Concept
D)Both (a) and (b) above

Question

Quizplus · Accepted Answer

The Realization Concept and Matching Concept are both fundamental to understanding and preparing a Profit & Loss Account. The Realization Concept pertains to recognizing revenue when it is earned, regardless of when the cash is received, while the Matching Concept involves matching expenses with the revenues they help to generate within the same accounting period, ensuring that the P & L Account accurately reflects the financial performance of the business.

The Basic Concepts Related to P & L Account Are