Question

Which of the following is/are correct statement(s)?

Statement 1: The Money Measurement Concept allows for the recording of all significant events, irrespective of their monetary value.

Statement 2: The Dual Aspect Principle ensures that every financial transaction is recorded twice in the accounting records.

Options

• Only Statement 1 is correct.

• Only Statement 2 is correct.

• Both Statements 1 and 2 are correct.

• Both Statements 1 and 2 are false.

Answer 1

Both Statements 1 and 2 are false.

Explanation:

• Statement 1 is false because the Money Measurement Concept tightly limits accounting to transactions that can be measured in monetary terms, excluding all qualitative events, regardless of their importance.
• Statement 2 is also false because the Dual Aspect Principle requires that each transaction affect at least two different accounts through corresponding debits and credits, rather than simply duplicating the physical act of recording the transaction twice.