Accounting Measurement


DEFINITION of 'Accounting Measurement'

The computation of economic or financial activities in terms of money, hours or other units. An accounting measurement is a unit of some measurable element that is used to compare and evaluate accounting data.

Accounting is often measured in terms of money; for example, when a company records weekly sales at $10,000. The same company could record those transactions in terms of units sold; for instance 5,000 units (of $2.00 products).

BREAKING DOWN 'Accounting Measurement'

Accounting is often quantified in terms of money but can also be recorded in terms of alternative units, number of labor hours, number of jobs created, etc. The different accounting measurements provide a better view of the overall health of the corporation by allowing varying methods of comparison and evaluation.

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  1. What is the difference between principles-based accounting and rules-based accounting?

    Almost all companies are required to prepare their financial statements as set out by the Financial Accounting Standards ... Read Full Answer >>
  2. Can working capital be depreciated?

    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>
  3. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  4. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  5. What does high working capital say about a company's financial prospects?

    If a company has high working capital, it has more than enough liquid funds to meet its short-term obligations. Working capital, ... Read Full Answer >>
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