Which item is excluded from the accounting records under the money measurement concept?
Correct answer: C. The employees' high level of motivation
- A. Cash paid for office equipment
- B. A bank loan received by the business
- C. The employees' high level of motivation
- D. Goods purchased for resale on credit
Explanation
The money measurement concept records events that can be expressed reliably in monetary terms. Employee motivation may be valuable, but it cannot normally be measured objectively as a financial amount.
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Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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