Money measurement concept

                                                                                                                                    

MBA

Accounting for Managers

ASSIGNMENT

 

Course Code: MMPC-004

Assignment Code: MMPC-004/TMA/JULY/2022 

Coverage : All Blocks

1. Explain the following accounting concepts

b) Money measurement concept

The money measurement concept is a fundamental accounting principle that states that only those transactions that can be measured in monetary terms should be recorded in the accounting system. According to this concept, any transaction that cannot be expressed in monetary terms is not considered to be significant enough to be recorded in the accounting system. 

In other words, the money measurement concept requires that only those transactions that can be quantified in terms of money or currency should be recorded, and all other transactions should be ignored. This concept assumes that money is the common unit of measurement for business transactions and that monetary values provide an objective and universally accepted measure of the value of a transaction.

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