Everything a firm owns, it also owes out to somebody. This co-incidenceis explained by the . . . . . . . . concept.

The correct answer is: A. dual aspect.

The dual aspect concept is the idea that every economic event has two aspects: a financial effect on one side of the balance sheet and a corresponding financial effect on the other side. For example, when a company buys inventory, it increases its assets (inventory) and increases its liabilities (accounts payable).

The other options are incorrect because:

• Prudence is the concept that accountants should be conservative in their estimates and avoid overstating assets or income.
• Money measurement is the concept that only economic events that can be measured in monetary terms should be recorded in the financial statements.
• Revenue recognition is the concept that revenue should be recognized when it is earned, not when it is received.