The correct answer is: D. Money measurement concept
Window dressing is the practice of manipulating financial statements to make a company look more profitable or financially stable than it actually is. This can be done by delaying or accelerating the recognition of revenue or expenses, or by using accounting methods that are not in accordance with generally accepted accounting principles (GAAP).
The money measurement concept is one of the basic concepts of accounting. It states that only transactions that can be expressed in monetary terms should be recorded in the financial statements. This concept is important because it helps to ensure that financial statements are accurate and reliable.
Window dressing violates the money measurement concept because it involves manipulating financial statements in order to make a company look better than it actually is. This can lead to inaccurate and misleading financial statements, which can harm investors and other users of financial information.
Here are brief explanations of the other options:
- Convention of conservation is the principle that assets should be recorded at their historical cost, less any accumulated depreciation. This convention is designed to provide a conservative view of a company’s financial position.
- Convention of disclosure is the principle that all relevant information should be disclosed in financial statements. This convention is designed to provide users of financial statements with all the information they need to make informed decisions.
- Convention of materiality is the principle that only information that is significant to the users of financial statements should be disclosed. This convention is designed to avoid overburdening financial statements with unnecessary information.