Business entity concept can also be known as separate entity concept a business entity concept is the financial activities are record distinct from the people who finance it such as owners, creditors, customers, and employers the accounting records reflect the financial activities of a specific corporate entity. The money measurement concept underlines the fact that in accounting and economics generally, every recorded event or transaction is measured in terms of money, ie, the local currency monetary unit of measure using this principle, a fact or a happening or event which cannot be expressed in terms of money is not recorded in the accounting books. The money measurement concept recognizes transactions which are in the nature of financial, ie, in terms of money, are recorded in the books of accounts in business practice all the transactions are measured, expressed and recorded in terms of money.
Definition of accounting concepts: rules of accounting that should be followed in preparation of all accounts and financial statements (14) money measurement: the accounting process records only activities that can be expressed in monetary terms (17) unit of measurement: financial data should be recorded with a common unit of measure.
Money measurement concept discussed with example ,concept of reliability with examplewant to know more about money measurement concept let us know. The money measurement concept states that a business should only record an accounting transaction if it can be expressed in terms of money this means that the focus of accounting transactions is on quantitative information, rather than on qualitative information thus, a large number of items are. L business entity concept l money measurement concept l going concern concept l accounting period concept l accounting cost concept l duality aspect concept l realisation concept l accrual concept l matching concept business entity concept this concept assumes that, for accounting purposes, the business enterprise and its owners are two separate independent entities.
Money measurement concept is important and one can complete the accounting work this concept should be followed the money measurement concept recognizes.
Money supply m3 or broad money: m 3 is a broad concept of money supply in addition to the items of money supply included in measure m 1, in money supply m^ time deposits with the banks are also included thus m 3 = m 1 + time deposits with the banks.
Accounting concept stands on 4 basic ones and money measurement concept is one of them money measurement concept state- “ any transaction which can be measured in monetary value and are relevant to business transactions, will be recorded and anything otherwise will be left out of the records . The money measurement concept states that a business should only record an accounting transaction if it can be expressed in terms of money this means that the focus of accounting transactions is on quantitative information, rather than on qualitative information.
For a business, the money measurement concept means that items that are not quantifiable in monetary terms â- like goodwill, customer service quality and staff skill levels â- are not included in account records. Definition of m0, m1, m2, m3, m4 different measures of money supply not all of them are widely used and the exact classifications depend on the country m0 and m1, also called narrow money, normally include coins and notes in circulation and other money equivalents that are easily convertible into cash m2 includes m1 plus short-term time.