The correct answer is: C. Matching
The matching concept is an accounting concept that requires expenses to be matched with the revenues they generate in the same accounting period. This concept is used to ensure that the financial statements are accurate and that the company’s performance is properly measured.
The cost concept is an accounting concept that requires assets to be recorded at their historical cost. This concept is used to ensure that the financial statements are objective and that the company’s assets are properly valued.
The realization concept is an accounting concept that requires revenue to be recognized when it is realized or realizable. This concept is used to ensure that the financial statements are accurate and that the company’s revenue is properly measured.
The disclosure concept is an accounting concept that requires companies to disclose all material information in their financial statements. This concept is used to ensure that investors have all the information they need to make informed decisions about the company.
In conclusion, the matching concept is the accounting concept that is used to prepare the Profit and Loss Account. This concept requires expenses to be matched with the revenues they generate in the same accounting period. This concept is used to ensure that the financial statements are accurate and that the company’s performance is properly measured.