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Accounting does not record non-financial transactions because of :
- a)Accrual concept
- b)Cost concept
- c)Continuity concept
- d)Money Measurement concept
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Accounting does not record non-financial transactions because of :a)Ac...
Money Measurement Concept:
The money measurement concept is one of the fundamental accounting principles that states that accounting only deals with transactions that can be measured in monetary terms. This concept provides the basis for recording financial transactions in the accounting records.
Explanation:
- Non-financial transactions, such as employee morale, customer satisfaction, or environmental impact, cannot be quantified in monetary terms. Therefore, these transactions are not recorded in the financial statements.
- Accounting focuses on quantifiable and measurable transactions that can be expressed in monetary terms. This allows for consistency and comparability in financial reporting.
- By excluding non-financial transactions from accounting records, the financial statements remain clear, concise, and relevant to users who rely on financial information to make decisions.
Importance of Money Measurement Concept:
- Ensures objectivity and reliability in financial reporting.
- Facilitates comparison of financial information across different time periods and entities.
- Enables stakeholders to assess the financial performance and position of a business accurately.
Overall, the money measurement concept plays a crucial role in maintaining the integrity and relevance of accounting information by excluding non-financial transactions from the financial records.
The money measurement concept is one of the fundamental accounting principles that states that accounting only deals with transactions that can be measured in monetary terms. This concept provides the basis for recording financial transactions in the accounting records.
Explanation:
- Non-financial transactions, such as employee morale, customer satisfaction, or environmental impact, cannot be quantified in monetary terms. Therefore, these transactions are not recorded in the financial statements.
- Accounting focuses on quantifiable and measurable transactions that can be expressed in monetary terms. This allows for consistency and comparability in financial reporting.
- By excluding non-financial transactions from accounting records, the financial statements remain clear, concise, and relevant to users who rely on financial information to make decisions.
Importance of Money Measurement Concept:
- Ensures objectivity and reliability in financial reporting.
- Facilitates comparison of financial information across different time periods and entities.
- Enables stakeholders to assess the financial performance and position of a business accurately.
Overall, the money measurement concept plays a crucial role in maintaining the integrity and relevance of accounting information by excluding non-financial transactions from the financial records.
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Accounting does not record non-financial transactions because of :a)Accrual conceptb)Cost conceptc)Continuity conceptd)Money Measurement conceptCorrect answer is option 'D'. Can you explain this answer?
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Accounting does not record non-financial transactions because of :a)Accrual conceptb)Cost conceptc)Continuity conceptd)Money Measurement conceptCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Accounting does not record non-financial transactions because of :a)Accrual conceptb)Cost conceptc)Continuity conceptd)Money Measurement conceptCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Accounting does not record non-financial transactions because of :a)Accrual conceptb)Cost conceptc)Continuity conceptd)Money Measurement conceptCorrect answer is option 'D'. Can you explain this answer?.
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