Which one of the following accounting concepts is applied by an entity when events such as new compe...........

General Accounting Principles Concepts of Accounting

Which one of the following accounting concepts is applied by an entity, when events such as new competitor entering in the market and rift between production and marketing departments are not disclosed in the books of accounts ?

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EPFO AO EO 2021

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Matching

Money Measurement

Revenue Recognition

Cost

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Explanation:

The accounting concept involved when an entity chooses not to disclose certain non-financial events, like a new competitor entering the market or internal departmental rifts, is the Money Measurement concept. This principle states that only transactions and events quantifiable in monetary terms are recorded in the financial statements.

- Option 2: Money Measurement - The correct concept, since it stipulates that only activities and conditions expressed in monetary terms are included in the accounts, excluding qualitative factors not measured in currency. Correct Answer

- Option 1: Matching - Involves aligning revenues with related expenses, not related to disclosure of non-monetary events.

- Option 3: Revenue Recognition - Addresses when revenue should be recognized, not related to non-monetary event exclusion.

- Option 4: Cost - Involves accounting for expenditures, not pertinent to the exclusion of unquantifiable events.