Question

Accounting measures a business transaction in terms of _______ units.

Answer 1

Answer:

Money measurement concept of accounting says that only transactions which are having monetary value should be recorded in books of account. If the transaction does not involve any monetary value, might be affecting the business, but this will not be recorded in books of account.

If Managing Director is seriously sick, this may naturally affect the business but does not carry any monetary value, hence no implication will be given to books of account.