The accounting convention that means only those transactions that are capable of being expressed in monetary terms are recorded is the:
A) historical cost convention.
B) conservatism convention.
C) money measurement convention.
D) reliability convention.

Question

Quizplus · Accepted Answer

The money measurement convention states that only transactions that can be expressed in monetary terms will be recorded in accounting. This is because accounting is primarily concerned with measuring and reporting financial information, which is inherently expressed in monetary terms. The historical cost convention is concerned with recording assets at their original purchase price, while the conservatism convention promotes caution in the accounting estimates and decisions. The reliability convention requires that financial information is accurate and trustworthy.

The Accounting Convention That Means Only Those Transactions That Are