Question

According to Money measurement concept, the following will be recorded in the books of accounts.

• A. Quality control in business
• B. Commission payable to salesman
• C. Extra profit due to introduction of a budgetary control system
• D. All of these

Answer 1

The correct option is B Commission payable to salesman

The concept of money measurement states that only those transactions and happenings in an organisation which can be expressed in terms of money such as sale of goods or payment of expenses or receipt of income, etc. are to be recorded in the book of accounts.

All such transactions or happenings which can not be expressed in monetary terms, for example, the appointment of a manager, do not find a place in the accounting records of a firm.

Hence, in the above case, only commission payable to salesman will be recorded in the books of accounts.