Money as a Measurement

Accounts are kept in terms of money, and the only arithmetic used in accounting is addition and subtraction. You can add one amount to another or subtract one amount from another, only if the amounts have a common denominator. This denominator is money.

In essence, business is essentially about money. Stocks/inventory are simply money in another form and the goal of the business is to transform them back into money again by selling them to customers.

If things are not stated in terms of money, accounting can't record them, which means that accounting records can't tell you everything about the entity. For example, accounting won't tell you about a manager's ability, the entity's reputation, customer loyalty, the value of a new product, or other information that cannot be stated in monetary amounts. But accounting tells you more about the entity's performance and financial well-being than any other source of information.