class 11 accountany are valuable resources owned by a business enterprise which can be measured in terms of money
Answers
Answer:
The concept of money, measurement states that only those events that can be expressed in monetary terms are recorded in the books of accounts.
Numerous transactions affect the business in varied ways. However, recording, classification and particularity, summarization of these heterogeneous business transaction requires that these transactions be expressed in terms of common unit of measurement. The concept of money measurement is that the records of the transactions are to be kept not in the physical units but in the monetary unit.
E.g., 10 machinery of Rs.1,00,000 each are purchased and this event is recorded in the books with a total amount of Rs.1,00,000.
The factor which can make it difficult to compare the monetary values of one year with the monetary values of another year is inflation. Due to the changes in prices, the value of money does not remain the same over a period of time.The value of rupee today on account of rise in prices is much less than what it was, say ten years back.
Therefore, in the balance sheet, when we add different assets bought at different points of time, say building purchased in 1995 for Rs. 2 crores and plant purchase in 2005 for Rs. 1 crore, we are in fact adding heterogeneous values which cannot be clubbed together. As the change in the value of money is not reflected in the book of accounts, the accounting data does not reflect the true and fair view of the affairs of an enterprise.
Answer:
Ya we can measure everything in business by money