Which of the Following Best Illustrates the Unit of Account

question 164

Multiple Choice

Which of the following best illustrates the unit of account function of money?

• A) You list prices for clothing sold on your Web site, www.nattydresser.com, in dollars.
• B) You pay for your cruise tickets with dollars.
• C) You keep $50 in your backpack for emergencies.
• D) You keep your tips earned from your tour guide job in a separate jar at home.

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Definitions:

Journalize

The act of recording business transactions in the chronological accounting record known as the journal.

Terms 2/10, N/30

A payment term indicating that a buyer can take a 2% discount on the invoice amount if the payment is made within 10 days; otherwise, the full invoice amount must be paid within 30 days.

Perpetual Inventory Method

The perpetual inventory method is a system of accounting for inventory that continuously updates the quantity and value of inventory items after every transaction.

Journalize

The act of recording transactions in the accounting journals as part of the bookkeeping process.