Merits and demerits of money measurement concept
Write down the merits and demerits of the money measurement concept.
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The money measurement concept describes and states that only items which can be evaluated in monetary terms are comprised in financial statements. The major merits are that it creates it easier to collective and recapitulate transactions and compare financial statements. Additionally, the concept is proper as business is regarding money, and it is simply understood and convenient for the internal and external users of financial statements. The major demerits of the monetary measurement concept are which it limits usefulness of information in financial statements since non-financial items are ignored.
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