Question

It is assumed that only these transaction
that could be expressed in monetary termos
under kinich of the following concepts
​

Answer 1

Answer:

Money measurement Concept

It is assumed that only these transaction that could be expressed in monetary terms under Money Measurement Concept.

Money Measurement Concept :

This Concept states that only those transactions and happenings in an organisation which can be expressed in terms of money are to be recorded in the books of accounts.

Accounting Concepts :

Accounting Concepts are the fundamental ideas or basic assumptions underlying the theory and practice of financial accounting. The basic Accounting concepts are ;

• Business Entity Concept

• Money measurement Concept

• Going Concern Concept

• Accounting Period Concept

• Cost Concept

• Dual Aspect Concept

etc..

Answer 2

ANSWER :

Under Money Measurement Concept, it is assumed that only these transaction that could be expressed in monetary terms.

MORE INFORMATION :

➟ Money Measurement Concept :-

According to the Money Measurement Concept, only those events which are capable of being expressed in terms of money are recorded in the books of accounts.

• The accounting system uses money as its basic unit of measurement. An event will not be recorded in the books of the business, whatever may be its importance for the business, unless its effect can be measured in terms of money.

• The money measurement concept operates on the assumption that the value of money remains constant throughout the accounting period. The effect of inflation/deflation on the value of money completely ignored.

➟ Role of Money Measurement Concept :-

• [1] Evaluation of divergent items into common denominator : Since money is the common measuring unit, it makes the recording and comparison possible. Thus, it gives a complete picture of assets, liabilities, income as well ss expenses of a business.

• [2] Objectivity : The expression of various elements of financial statements makes the accounting objective and verifiable.

• [3] Medium of communication : Money measurement is the communication procsss of the activities of a firm.

➟ Limitation of Money Measurement Concept :-

• [1] It doesn't consider the changes in the purchasing power of money.

• [2] It doesn't consider the development of human resource accounting.

• [3] It excludes qualitative aspect of an event.