Money Measurement Concept

This is the concept tunes the system of accounting as fruitful in recording the transactions
and events of the enterprise only in terms of money. The money is used as well as
expressed as a denominator of the business events and transactions. The transactions
which are not in the expression of monetary terms cannot be registered in the book of
accounts as transactions.
For e.g. 5 machines, 1 ton of raw materials, 6 fork lift trucks, 10 lorries and so on. The
early mentioned items are not expressed in terms of money instead they are illustrated
only in numbers. The worth of the items are getting differed from one to another. To
record the above enlisted items in the book of accounts, all the assets should be converted
in to money. For e.g. 5 lathe machines worth Rs 1,00,000; 1 ton of raw materials worth
amounted Rs. 15,00,000 and so on.
The transactions which are not in financial in character cannot be entered in the book of
accounts.

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