Question

An employee is dismissed from his job. Does this event represent a business transaction? Support you answer with the explanation of the appropriate assumption.
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Answer 1

Answer:

Money Measurement Concept

No this event does not represent a business transaction since according to the money measurement concept only those transactions are supposed to be recorded in the books of account which can be measured in terms of money or are of at least any financial character.Since the dismissal of an employee can't be measured and expressed in terms of money hence it does not represent a business transaction.