Explanation:

The correct answer is option D - Accrual.

Accrual accounting is an accounting method that recognizes revenue and expenses when they are earned or incurred, regardless of when the cash is received or paid. It follows the matching principle, which states that expenses should be recognized in the same period as the revenue they help generate.

In this case, Gyan received Rs. 5,000 as an advance from a customer. However, by showing this amount as his income, he is not following the accrual accounting concept. Here's why:

1. **Accrual Concept**:
- The accrual concept states that revenue should be recognized when it is earned, not when the cash is received.
- In this case, Gyan has received an advance from a customer, which means he has not yet earned the revenue. It is not appropriate to recognize the advance as income before the goods or services are provided to the customer.

2. **Income Recognition**:
- According to the income recognition principle, revenue should be recognized when it is earned, and it is considered earned when the goods are delivered or services are rendered to the customer.
- In this case, Gyan has received an advance, but he has not yet delivered the goods or provided the services to the customer. Therefore, recognizing the advance as income would not be in line with the income recognition principle.

3. **Distortion of Financial Statements**:
- By showing the advance as income, Gyan would be misrepresenting the financial statements.
- The income statement would show higher revenue, leading to a misrepresentation of the actual performance of the business during the period.
- Similarly, the balance sheet would also be affected, as the cash balance would increase, but the corresponding liability to the customer would not be recognized until the goods or services are delivered.

Therefore, by recognizing the advance as income, Gyan is not following the accrual accounting concept, which requires revenue to be recognized when it is earned, and the goods or services are delivered or rendered to the customer.