Wednesday, June 10, 2015

MONETARY UNIT ASSUMPTION

In accounting records, a concern will include only the transactions that can be expressed in terms of money i.e. every business transaction has to measure in terms of money. Money has been regarded as the language of accounting. “Accounting focuses on the measurement and reporting, in monetary terms, of the flow of resources into and out of an organization, of the resources controlled by the organization, and of the claims against those resources”. Besides, Accounting is limited to the production of information expressed in terms of a monetary unit, it does not record and communicate other relevant but non-monetary information. It ensured uniformity and comparability of the information. 

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