The _________ measures net profit/ loss by matching revenues and expenses according to the accounting principles.

trading A/c

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manufacturing account

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profit and loss A/c

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none of the above

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Solution

The correct option is C profit and loss A/c
Profit and Loss Account measures net profit/loss by matching revenues and expenses according to the Matching Principle. The matching principle is one of the basic underlying guidelines in accounting. This principle requires a company to match expenses with related revenue. The matching is based on a cost and effect relationship.

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Similar questions

Q. The ___________ measure net profit/loss by matching revenues and expenses according to the accounting principles.

Q. The adjustment entry to write off deferred revenue expenditure is?

Deferred Revenue Expenditure A/c To Profit & Loss A/c	Dr.
Expense A/c To Profit & Loss A/c	Dr.
Profit & Loss A/c To Provision for Expense A/c	Dr.
Profit & Loss A/c To Deferred Revenue Expenditure A/c	Dr.

Q. As per ______ concepts in order to determine the profit earned or loss suffered by the business in a particular defined accounting period, it is necessary that expenses of the period should be matched with the revenues of that period.

State whether the following statement are true or false.

1. Final Accounts are prepared on the basis of Trial Balance.
2. Trading Account is a part of Profit & Loss Account.
3. Profit Loss Account is prepared to find out Gross Profit or Gross Loss.
4. Gross Profit or Gross Loss is transferred to Balance Sheet.
5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
8. Capital account is a personal account.
9. Amount of prepaid expenses appears on assets side.
10. Bank Overdraft is a liability of business concern.

Interest on Debentures is a/an ___ and is debited to the Profit & Loss A/c.

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