The monetary unit assumption states that only transactions that can be measured in terms of money should be recorded in the accounting records.

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The monetary unit assumption is a fundamental principle of accounting that requires transactions or events to be measured and recorded in a common monetary unit. This means that non-monetary events or transactions, such as the value of employee satisfaction or the quality of customer service, cannot be recorded in accounting records because they cannot be expressed in monetary terms.

The Monetary Unit Assumption States That Only Transactions That Can