The monetary unit assumption assumes that: A)the value of money is not stable. B)the idea that expressing financial facts and events is meaningful only when they can be expressed in monetary terms. C)the business will continue to operate indefinitely. D)revenues and expenses of a business can be separated into separate time periods.

Question

Quizplus · Accepted Answer

The monetary unit assumption assumes that financial facts and events can only be expressed meaningfully in monetary terms. This means that non-monetary information (such as qualities of management or employee satisfaction) is not considered in financial statements. The assumption does not make any statements about the stability of the value of money or the continuity of the business. Separation of revenues and expenses into time periods is governed by the revenue recognition and matching concepts, rather than the monetary unit assumption.

The Monetary Unit Assumption assumes That