Question

Please give an example of the application of the Measurement principle in accounting. The example needs to be from a company's financial statements or its notes.

Answer 1

The money measurement concept states that a business should only record an accounting transaction if it can be expressed in terms of money.

This means that the focus of accounting transactions is on quantitative information, rather than on qualitative information.

Thus, a large number of items are never reflected in a company's accounting records, which means that they never appear in its financial statements.

Examples of items that cannot be recorded as accounting transactions because they cannot be expressed in terms of money include:

Non Monetary items:

Employee skill level

Employee working conditions

Expected resale value of a patent

Value of an in-house brand

Product durability

The quality of customer support or field service

The efficiency of administrative processes

In financial Statement every items and position of any company is measured in terms of money only.

Example of Apple Inc. Financial Statement is here. It is written in Title It is in all amounts are expressed in terms of millions.

Apple Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In millions, except number of shares which are reflected in thousands and per share amounts) Three Months Ended December 28, December 29, 2019 2018 Net sales: Products 79,104 $ 73,435 Services 12,715 10,875 Total net sales 91,819 84,310 Cost of sales: Products 52,075 48,238 Services 4,527 4,041 Total cost of sales 56,602 52,279 Gross margin 35,217 32,031 Operating expenses: Research and development Selling, general and administrative Total operating expenses 4,451 5,197 9,648 3,902 4,783 8,685 Operating income Other income/expense), net Income before provision for income taxes Provision for income taxes Net income 25,569 349 25,918 3,682 22,236 23,346 560 23,906 3,941 19,965 $

Apple Inc. Notes to Consolidated Financial Statements Note 1 - Summary of Significant Accounting Policies Apple Inc. and its wholly-owned subsidiaries (collectively "Apple" or the "Company") designs, manufactures and markets mobile communication and media devices and personal computers, and sells a variety of related software, services, accessories and third- party digital content and applications. The Company's products and services include iPhone, iPad, Mac, Apple Watch, AirPods, Apple TV, HomePod, a portfolio of consumer and professional software applications, iOS, macOS, watchOS and tvOS operating systems, iCloud, Apple Pay and a variety of other accessory, service and support offerings. The Company sells and delivers digital content and applications through the iTunes Store, App Store, Mac App Store, TV App Store, Book Store and Apple Music (collectively "Digital Content and Services"). The Company sells its products worldwide through its retail stores, online stores and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers and resellers. In addition, the Company sells a variety of third-party Apple-compatible products, including application software and various accessories, through its retail and online stores. The Company sells to consumers, small and mid-sized businesses and education, enterprise and government customers. Basis of Presentation and Preparation The accompanying consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been eliminated. In the opinion of the Company's management, the consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. Certain prior period amounts in the consolidated financial statements and accompanying notes have been reclassified to conform to the current period's presentation. The Company's fiscal year is the 52- or 53-week period that ends on the last Saturday of September. The Company's fiscal years 2018 and 2016 spanned 52 weeks each, whereas fiscal year 2017 included 53 weeks. A 14th week was included in the first fiscal quarter of 2017, as is done every five or six years, to realign the Company's fiscal quarters with calendar quarters. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company's fiscal years ended in September and the associated quarters, months and periods of those fiscal years.