Which is the money measurement concept?
The money measurement concept (also called monetary measurement concept) underlines the fact that in accounting and economics generally, every recorded event or transaction is measured in terms of money, the local currency monetary unit of measure.
What is money measurement concept why it is important?
All monetary transactions that take place in an entity are recorded. Money measurement concept helps in the preparation of financial statements. As all the transactions are recorded it becomes easier to compare the results of one period to another. It forms a basis of evidence in legal matters.
Which of the concepts are important in new money measures?
There must be controlled expansion of money supply if the objective of development with stability is to be achieved. A healthy growth of an economy requires that there should be neither inflation nor deflation. Inflation is the greatest headache of a developing economy.
What is money measurement concept Class 11?
Money Measurement : The concept of money measurement states that only those transactions and happenings in an organisation, which can be expressed in terms of money are to be recorded in the book of accounts. Also, the records of the transactions are to be kept not in the physical units but in the monetary units. 3.
What is money measurement concept why this concept is also limitation?
A limitation of the monetary measurement concept is that items that impact a company’s future financial results are not recorded. The monetary measurement concept assumes that the value of currency remains stable and does not change.
What is money measurement concept of accounting mention a major limitation of this concept?
Limitations of Money Measurement Concept Some of the limitations of the money measurement concept are as follows: 1. It does not take into account the impact of non-monetary events on business. 2. It ignores the impact of inflation on historic costs.
What is money measurement concept why this concept is also limitations?
What is money measurement concept which one factor can make it difficult to compare?
The factor which can make it difficult to compare the monetary values of one year with the monetary values of another year is inflation. Explore more such questions and answers at BYJU’S.
What is concept of money supply?
The money supply is the total amount of money—cash, coins, and balances in bank accounts—in circulation. The money supply is commonly defined to be a group of safe assets that households and businesses can use to make payments or to hold as short-term investments.
What is cost concept with example?
Explanation. Under the cost concept of accounting, an asset should be recorded at the cost at which it was purchased, regardless of its market value. For example, if a building is purchased for $500,000, it will continue to appear in the books at that figure, irrespective of its market value.
Which of the following is observed under money measurement concept Mcq?
Which of the following is observed under money measurement concept? * Transactions of only financial nature are recorded. Distinction between capital and revenue expenditure made. Revenue is recognised on its realisation.
Why it is important to adopt the concept of consistency for the preparation of financial statements explain with example?
According to the Consistency Principle, accounting practices once selected should be continued over a period of time (i.e. years after years) and should not be changed very frequently. These help in a better understanding of the financial statements and thus make comparisons easy.