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CBSE Class 11-commerce Answered

Explain money measurement concept.
Asked by Topperlearning User | 09 Jun, 2016, 12:21: PM
answered-by-expert Expert Answer

According to money measurement concept, only those business transactions and events which can be expressed in money terms such as sale of goods and receipt of income are recorded in the books of accounts. The transactions which cannot be expressed in money terms such as not having good terms between production manager and dispatch head of the department and appointment of manager are not recorded in the books of accounts.

These records of transactions are to be maintained in monetary units such as land and building worth Rs. 10 crore and computers worth Rs. 30 lakh; it cannot be recorded as 3 buildings and 42 computers in the books of accounts. Hence, for the accounting purpose, these items are necessarily presented in money terms and recorded in rupees and paise. The value of rupee changing over a period of time is the main limitation of this assumption. It does not represent fair view of business affairs because a change in the value of money is not reflected in the books of account.

Answered by | 09 Jun, 2016, 02:21: PM
CBSE 11-commerce - Accountancy Part I
Asked by Topperlearning User | 09 Jun, 2016, 12:14: PM
ANSWERED BY EXPERT ANSWERED BY EXPERT
CBSE 11-commerce - Accountancy Part I
Asked by Topperlearning User | 09 Jun, 2016, 12:14: PM
ANSWERED BY EXPERT ANSWERED BY EXPERT
CBSE 11-commerce - Accountancy Part I
Asked by Topperlearning User | 09 Jun, 2016, 12:14: PM
ANSWERED BY EXPERT ANSWERED BY EXPERT
CBSE 11-commerce - Accountancy Part I
Asked by Topperlearning User | 09 Jun, 2016, 12:21: PM
ANSWERED BY EXPERT ANSWERED BY EXPERT
CBSE 11-commerce - Accountancy Part I
Asked by Topperlearning User | 09 Jun, 2016, 12:14: PM
ANSWERED BY EXPERT ANSWERED BY EXPERT
CBSE 11-commerce - Accountancy Part I
Asked by Topperlearning User | 09 Jun, 2016, 12:14: PM
ANSWERED BY EXPERT ANSWERED BY EXPERT
CBSE 11-commerce - Accountancy Part I
Asked by Topperlearning User | 09 Jun, 2016, 12:14: PM
ANSWERED BY EXPERT ANSWERED BY EXPERT
CBSE 11-commerce - Accountancy Part I
Asked by Topperlearning User | 09 Jun, 2016, 12:14: PM
ANSWERED BY EXPERT ANSWERED BY EXPERT
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