Money measurement concept
Encyclopedia
The money measurement concept
underlines the fact that in accounting, every recorded event or transaction is measured in terms of money
. Using this principle, a fact or a happening which cannot be expressed in terms of money is not recorded in the accounting books. Thus, it is not acceptable to record such non-quantifiable items as employee skill levels or the quality of customer service.
One of the basic principles in accounting is "The Measuring Unit principle: The unit of measure
in accounting shall be the base money unit of the most relevant currency.
This principle also assumes the unit of measure is stable; that is, changes in its general purchasing power are not considered sufficiently important to require adjustments to the basic financial statements.The inflation which occurs over the passage of time is not considered."
Concept
The word concept is used in ordinary language as well as in almost all academic disciplines. Particularly in philosophy, psychology and cognitive sciences the term is much used and much discussed. WordNet defines concept: "conception, construct ". However, the meaning of the term concept is much...
underlines the fact that in accounting, every recorded event or transaction is measured in terms of money
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
. Using this principle, a fact or a happening which cannot be expressed in terms of money is not recorded in the accounting books. Thus, it is not acceptable to record such non-quantifiable items as employee skill levels or the quality of customer service.
One of the basic principles in accounting is "The Measuring Unit principle: The unit of measure
Unit of measure
Unit of measure may refer to:* Units of measurement for relevance to weights and measures* Unit of account for relevance in economics* Unit of Measure , a 2000 album by Tony Rice...
in accounting shall be the base money unit of the most relevant currency.
This principle also assumes the unit of measure is stable; that is, changes in its general purchasing power are not considered sufficiently important to require adjustments to the basic financial statements.The inflation which occurs over the passage of time is not considered."