Commercial Applications
The Money Measurement Concept allows the recording of non-monetary transactions, such as the reputation of a company, as long as they are significant to the business.
- True
- False
Answer
False
Reason — According to the Money Measurement Concept, only those transactions that can be expressed in terms of money are recorded in the books of accounts. Non-monetary items like reputation, quality of management, employee loyalty, etc., however important they may be, cannot be recorded as their monetary effect cannot be measured.
Related Questions
It is the second stage and provides conclusions.
- Accounting
- Book keeping
- Book maintaining
- Book recording
A company values its machinery at its original purchase cost minus accumulated depreciation. This valuation method is based on which of the following assumptions?
- Money Measurement Concept
- Going Concern Concept
- Realisation Principle
- Dual Aspect Principle
Accounting cycle ends with the ……………
- Recording of transactions in journal
- Preparing income statement
- Posting entries in ledger
- Preparation of balance sheet
Which of the following statement(s) is/are correct?
Statement 1: The Going Concern Concept assumes that a business will not cease operations in the near future.
Statement 2: The Business Entity Concept implies that the business and its owner are separate entities, and the owner's personal transactions should be recorded in the business books.
- Only Statement 1 is correct
- Only Statement 2 is correct
- Both Statements 1 and 2 are correct
- Both Statements 1 and 2 are false