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.

FOR — The statement is correct and is based on the Money Measurement Concept.

Reasons:

1. Money is a Common Denominator — Money is the only common unit that allows diverse items such as raw materials, machinery, land and buildings, furniture and fixtures to be added together and compared. Without a common denominator, accounting records would not be homogeneous, relevant, simple or understandable.

2. Objectivity and Accuracy — An event, however important, 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 a company cannot be recorded because its monetary effect cannot be objectively measured (except in terms of gratuity and other benefits payable).