Introduction To Accounting: Part 13: Money Measurement Concept

Nishant Kumar
28 Jun 0 0
  1. According to the Money Measurement Concept, only those transactions and events are recorded in the books of accounts which can be measured in terms of money.

  2. Therefore, a transaction which cannot be measured in terms of money, no matter how crucial it is to the business entity, is not recorded.

  3. For example, suppose there is a very hard working and an intelligent employee in the company with the help of whom, the business keeps on growing every day. Suddenly, this employee resigns. Now, this would be a huge loss of skill to the company. But, since resignation of an employee cannot be measured in terms of money, this will not be recorded in the books of accounts of the Company.

 

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