Multiple choice

Which of the following is correct in respect of accounting?

  1. Only those transactions and events which are of financial character will be recorded in terms of money.

  2. All the events and transactions will be recorded in the books of accounts irrespective of the fact whether these are of financial nature.

  3. Transactions to be recorded may be chosen by the Finance Manager or the MD of the Company.

  4. All of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A fundamental accounting principle is the monetary measurement concept: only transactions and events with financial character are recorded in monetary terms. Non-financial events (competitor strategy, employee morale, etc.) are not recorded because they cannot be objectively measured in money. Option B is wrong because non-financial events are NOT recorded. Option C is wrong because transaction recording follows objective rules, not managerial discretion.

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