Joan Begins the Month with $100 in Her Checking Account

question 273

Multiple Choice

Joan begins the month with $100 in her checking account. When she receives a pay check for $1,200 on the 5th of the month, she uses that pay check to put $1,000 in her checking account, takes $80 in cash, and deposit $120 in her savings account. During the month, she spends $550 on rent and utilities, $30 on household items, $10 on a T-shirt, and $350 on food, leaving a balance of $240 in her checking account. Based on the given information, which statement accurately describes the function of Joan's money?

• A) Savings is a store of value measured in units of account.
• B) Her expenditures use funds as a medium of exchange but with no role for money as a unit of account.
• C) Buying goods and services uses money as a store of value and unit of account.
• D) Depositing money in savings is using it as a medium of exchange.

---

Definitions:

Initial Cost

The original cost of acquiring an asset before any depreciation, amortization, or similar adjustment.

Cash Inflows

The total amount of money received by a company or individual during a set period.

Payback Period

The duration of time it takes to recover the cost of an investment, calculated as the point where net cash flow equals the initial investment.

Initial Cost

The initial expense associated with the purchase or investment in an asset before operational costs are considered.