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Question
Accounting Transactions are recorded in terms of ___________.
Accounting Transactions are recorded in terms of ___________.
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Solution
The correct option is B Money
Monetary Unit Assumption
In accounting we can communicate only those business transactions and other events which can be expressed in monetary units. This is called monetary unit assumption. Non monetary events like death, dispute etc. may have a great influence on the organization but these factors will not form the part of accounts as they can be calculated on monetary basis. According to this concept each & every accounting transaction is to be recorded in books of accounts in terms of money.
Monetary Unit Assumption
In accounting we can communicate only those business transactions and other events which can be expressed in monetary units. This is called monetary unit assumption. Non monetary events like death, dispute etc. may have a great influence on the organization but these factors will not form the part of accounts as they can be calculated on monetary basis. According to this concept each & every accounting transaction is to be recorded in books of accounts in terms of money.
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