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Learn More About Cost-volume-profit Analysis

Read on: The Money Measurement Convention

The money measurement convention

Both trade and accounting existed before the invention of money, which we know began to circulate in the 6th century B.C. Its role as a common denominator by which the value of assets of different kinds could be compared encouraged the extension of trade. By Roman times, money had become the language of commerce, and accounts were kept in money terms. Hence, there is an accounting tradition which dates back some 2000 years of keeping the records of valuable assets and of transactions in monetary terms. It should not appear surprising, therefore, that accounting... see: The Money Measurement Convention