Question

Ajay a customer had placed an order for purchase of furniture of Rs.50,000 against which he advances Rs.5,000.The business man wants to record it as sale.By doing so, which of the following accounting concept will be violate??
Money Measurement Concept
Cost Concept
Consistency Concept
Matching Concept

Answer 1

Dear Student
Ajay , a customer placed an order and paid Rs 5000 as advance and if businessman record it as a sale than he violated the concept of Money measurement concept. Because as per money measurement concept the transaction that can be measured in monetary terms need to be recorded in books only and transaction that are not recorded in monetary terms should not be recorded in books. In the given case Ajay placed order only so businessman should not supposed to record it.

Regards