Question

Due to which concept, accounting does not record non-financial transactions?

A Going concern concept Correct Answer Incorrect Answer
B Money measurement concept Correct Answer Incorrect Answer
C Accrual concept Correct Answer Incorrect Answer
D Cost concept Correct Answer Incorrect Answer

Solution

Accounting does not record non-financial transactions because of the money measurement concept . This concept states that only transactions that can be expressed in monetary terms can be recorded in the accounting records. Non-financial transactions, such as the appointment of a new manager or the development of a new product, cannot be expressed in monetary terms and therefore are not recorded in the accounting records.

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