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प्रश्न
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?
पर्याय
The Going Concern Concept
The Business Entity Concept
Money Measurement Concept
The Dual Aspect Concept
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उत्तर
Money Measurement Concept
Explanation:
The Money Measurement Concept states that only transactions and occurrences that may be stated or quantified in monetary terms should be documented in the books of accounts. Even while the retirement of a highly talented manager is a big event that can have a profound impact on a company’s operations, it is a qualitative change whose financial impact cannot be objectively and accurately measured; hence, it must be completely removed from accounting records.
संबंधित प्रश्न
Explain the Money Measurement Concept.
Accounting principles are necessary due to which of the following reasons?
According to this principle, accounts should be prepared in such a way that all the material information required by users of financial statements is clearly disclosed.
According to Business Entity Concept:
"Fixed assets should be valued at the market price." Comment.
Explain matching principle of accounting.
Explain Accounting Period Concept.
Explain the complete disclosure principle.
Explain the revenue principle.
Explain the realisation principle.
