Question

According to money measurement concept, working conditions in which the workers of the business have to work must be clearly recorded in the books of account. (True/False)

• A. True
• B. False

Answer 1

The correct option is B False

The money measurement concept states that a business should only record an Accounting transaction if it can be expressed in terms of money. This means that the focus of accounting transactions is on quantitative information, rather than on qualitative information. Thus, a large number of items are never reflected in a company's accounting records, which means that they never appear in its financial statement. Examples of items that cannot be recorded as accounting transactions because they cannot be expressed in terms of money include:

• Employee skill level
• Employee working conditions
• The expected resale value of a patent
• Value of an in-house brand
• Product durability
• The quality of customer support or field service
• The efficiency of administrative processes