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The Monetary Unit Concept
Money is the common denominator in business.
Expressing transactions and events in monetary units is
crucial to the use of financial statements for business
communications.
Accounting generally assumes a stable monetary unit.
Example of monetary units are the ringgit in the
Malaysia.
Example:
A transaction occurred in The organization but the value
cannot be determined.
Conclusion :
The transaction must be recorded in the monetary unit
concept and the value must not change with the inflation
situation.
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