Money Measurement Concepts
A facts or transactions which can be expressed in terms of money only recorded in Money Measurement concepts. In other words, it excludes Qualitative transaction such as working condition , Skilled labour, Health of the manager etc., Which is essential for smooth running of business operations.
It requires use of monetary unit as basis for measurement.
Different items are expressed in varied basis of Measurement.
Building - 20,000 sq feet of build up area
These, cannot be added to give useful information .But, by using rupee as a unit of measurement these can be expressed as
Land - 500 x 100 per Sq mts = 5, 00,000
Furniture - 2 x 2000 = 4,000
5 x 1,500 = 3,000
Building - 20,000 x 30 = 6, 00,000
Now, it is possible to add or subtract and use them for comparison.