Q.The financial statement of a unit in its lifetime is prepared on the basis of which concept :

Financial statements for a period are prepared on the Matching concept.

The Matching concept requires that the expenses of a period be matched against the revenue earned in that same period, so that the resulting profit or loss for the period is correctly determined — this is why outstanding expenses and prepaid expenses are adjusted even though cash may not have changed hands in that period. Rationality and 'Accounting Teno …

Identifying income and the expenditure incurred to earn it within the same period is the Matching concept.

Under the Matching concept, the expenses of a particular accounting period are matched against the revenue recognised in that same period so that net profit (or loss) for the period is correctly measured, irrespective of when the actual …