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What principle is followed by recording indirect expenses and incomes in the Profit and Loss Account?

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Question

What principle is followed by recording indirect expenses and incomes in the Profit and Loss Account?

Options

  • Matching Principle

  • Conservatism Principle

  • Cost Principle

  • Business Entity Principle

MCQ
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Solution

Matching Principle

Explanation:

The Matching Principle ensures that expenses and incomes are recorded in the same accounting period to correctly determine profit or loss

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