Question

Resignation by marketing is not the book of of account . Why?

Answer 1

In accounting we have 2 concepts. 1. Event 2. Transaction.

In books of accounts we always record Transactions only and not Events, as the Events do not have financial values assigned to it.

We record transactions as all the transactions have financial values assigned to it.

There is one more accounting concept known as Money Measurement Concept . According to this concept all transactions which are expressed in money terms are to be recorded in the books of accounts.

So as the " Resignation of Finance Manager" cannot be measured in money terms is not recorded in the books of accounts.

However Liabilities which may arise as a result of the resignation of Finance Manager will be recorded in the books of accounts.