Advertisements
Advertisements
प्रश्न
Explain the money measurement principle of accounting.
Advertisements
उत्तर
- On the basis of this concept, only those transactions are recorded in accounts which can be expressed in terms of money. In other words, an event, however important it may be to the business, will not be recorded unless its monetary effect can be measured with a fair degree of accuracy.
- For example, the retirement of the chairman of the company cannot be recorded because it is not possible to measure the monetary effect of retirement except in terms of gratuity and other benefits payable to the chairman.
- Money is a common denominator. With the help of money, diverse items can be added together. The total value of assets, such as raw materials, machinery, land and buildings, furniture and fixtures, etc., can be measured in terms of money. Thus, money measurement concept helps to make accounting records homogeneous, relevant, simple and understandable.
APPEARS IN
संबंधित प्रश्न
Justify the following:
Every transaction is recorded in at least three accounts.
“Firms live forever.” Explain with reference to the concept of accounting.
“Accounts should disclose all material information” (with reference to the concept of accounting). Justify either for or against by giving two reasons.
With reference to the concept of accounting only those transactions are recorded in accounts which can be expressed in terms of money. Justify either for or against.
Discuss in brief the basic principles of accounting.
"The capital provided by the owner is treated as a liability of the firm." Explain the concept on which the above depends.
"Every transaction affects at least three accounts." Comment.
Explain any two basic concepts of accounting.
Explain Accounting Period Concept.
Explain the expense principle.
