Multiple choice

All transactions/events are expressed in monetary terms. Which concept says this?

  1. Business entity concept

  2. Materiality concept

  3. Revenue recognition concept

  4. Money measurement concept
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The money measurement concept states that only events and transactions that can be measured in monetary terms should be recorded in accounting books. Qualitative factors like employee morale or management skill cannot be recorded. Business entity separates business from owner, materiality deals with significance thresholds, and revenue recognition determines when to record revenue.

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