The basic concepts related to P & L Accounts are ______________.

Realization concept

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Matching concept

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Cost concept

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Both (A) and (B)

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Solution

The correct option is D Both (A) and (B)
Realization concept assumes that the revenue is recognized only when there is sale or transfer of goods or assets. Sale is complete when the title of goods is passed on to the buyer.
Matching concept is based on accounting period concept also its related to the profit and loss account.

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