Question

Money measurement concept implies that every business transaction must be recorded in common unit of measurement i.e. in terms of money only.

• A. True
• B. False

Answer 1

The correct option is A True

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, the above statement is true.