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WAEC Financial Accounting 2021 Question 3

Question 3

Accounting Concepts and Conventions

A limitation of the money measurement concept is that

  1. A.it results in inaccurate financial statements.
  2. B.financial statement is not easily understood.
  3. C.important non-monetary activities are not reported.
  4. D.the reports are not comparable to that of other businesses.
Show the answer and explanation

Answer: C (important non-monetary activities are not reported.)

Explanation

Only items measured in money are recorded, so non-money facts like staff morale are left out.