Advertisements
Advertisements
Question
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.
Advertisements
Solution
The money measurement concept states that only transactions that can be quantified in monetary terms are recorded in accounts. In other words, no matter how significant an event is to the business, it won't be recorded unless its monetary impact can be measured with reasonable accuracy. This concept ensures that accounting records are consistent, relevant, straightforward, and easy to understand.
APPEARS IN
RELATED QUESTIONS
This concept assumes that the business will continue to exist for a long time in the future.
According to this principle, revenue is deemed to be realised when the goods have been transferred or the services have been rendered to a customer.
According to Business Entity Concept:
Every transaction has two effects. (with reference to the concept of Accounting). Give a reason either for or against.
The capital provided by the owner is a liability of the firm. Answer with reference to the concept of Accounting.
Explain 'Matching Concept' of GAAP.
"The capital provided by the owner is treated as a liability of the firm." Explain the concept on which the above depends.
Explain Accounting Period Concept.
Name any four concepts of GAAP.
"The principle of full disclosure and principle of materiality are contradictory." Comment.
