Doug Is Saving Money in Order to Purchase a New

question 35

Multiple Choice

Doug is saving money in order to purchase a new snowboard next winter.This represents using money as

• A)a medium of exchange.
• B)a store of value.
• C)a unit of account.
• D)a medium of deferred payment.
• E)a method of barter.

---

Definitions:

Discount on Note Payable

The difference between the face value of a note payable and its issue price when the note is sold for less than its face value, effectively acting as an interest expense over time.

Interest Expense

Money that an entity has to pay over time for the privilege of borrowing funds.

Liquidity

The measure of a company's or individual's ability to meet short-term obligations without raising external capital, often reflected by the amount of cash or easily convertible assets.

Operating Cycle

The period of time it takes for a company to purchase inventory, sell it to customers, and collect the cash from the sales.