Which of the following is an advantage of the monetary assumption?

The monetary assumption is a foundational principle in accounting that assumes financial transactions and statements are expressed in a stable unit of currency, which simplifies the reporting and analysis of financial data.

Choosing the option that states it enables the grouping and summarising of financial items is insightful because this principle allows for the aggregation of diverse financial transactions into standardized units. This grouping is essential for creating financial statements such as balance sheets and income statements, where items can be combined and summarized effectively to present a clear overview of a business's financial position and performance. By expressing financial relationships in monetary terms, accountants can present complex information in a way that is understandable and provides valuable insights into the entity's operations and financial health.

The other options do not accurately reflect advantages of the monetary assumption. While subjective comparisons might be possible in certain contexts, they fall outside the objective and standardized approach ensured by monetary terms. The statement about tangible assets is not a characteristic of the monetary assumption, as the assumption applies to all types of financial items, not just physical assets. Finally, the idea that value rarely changes over time contradicts the reality of inflation and other economic factors that can affect currency values, which means considerable care is needed when interpreting financial data over time.