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प्रश्न
Explain the money measurement principle of accounting.
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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.
संबंधित प्रश्न
What does GAAP stand for in Accounting?
Explain the Money Measurement Concept.
The retirement of manager of the company cannot be recorded in the book of accounts, because it is not possible to estimate the financial effect of retirement. Which accounting principle would be applicable for the above statement?
This principle suggests that every debit has a corresponding and equal credit.
Every transaction has two effects. (with reference to the concept of Accounting). Give a reason either for or against.
"Every transaction affects at least three accounts." Comment.
Explain matching principle of accounting.
Explain The Dual Aspect Principle.
Explain the complete disclosure principle.
"The principle of full disclosure and principle of materiality are contradictory." Comment.
