Explanation:

The Accounting Concept that is not followed in this scenario is Conservatism.

Conservatism Principle:

The Conservatism Principle suggests that while accounting for a transaction or event, an accountant should always choose the alternative that is least likely to overstate assets and income or understate liabilities and expenses. In other words, it is better to be conservative in financial reporting.

In the given scenario, Gyan has shown the advance received from the customer as his income, which is not correct. It is not an income as Gyan has not performed any service or delivered any goods yet. The correct treatment for an advance received from a customer is to show it as a liability until the delivery of goods or services. By treating the advance as income, Gyan has overstated his income and understated his liability, which is not in line with the Conservatism principle.

Other Accounting Concepts:

a) Money Measurement: This concept suggests that only those transactions and events should be recorded in the accounting system that can be expressed in monetary terms. This helps in quantifying the financial impact of every transaction.

b) Accrual: Accrual accounting is a method of accounting where transactions and events are recorded when they occur, irrespective of whether cash is received or paid. This helps in giving a more accurate picture of the financial health of an entity.

c) Consistency: This concept suggests that once an accounting policy or method is adopted, it should be consistently followed in all the subsequent periods, unless there is a valid reason to change it. This helps in ensuring comparability of financial statements over time.

Conclusion:

In conclusion, Gyan has not followed the Conservatism principle by treating the advance received from the customer as income. The correct treatment would have been to show it as a liability until the delivery of goods or services.

B