Which of the Following Applies to the Use of Money

question 351

Multiple Choice

Which of the following applies to the use of money as a unit of account?
I. A unit of account is an agreed measure for stating the prices of goods and services.
II. Using money as a unit of account creates a simplified pricing system.
III. Economies choose many goods as units of account.

• A) I only
• B) II only
• C) I and III
• D) I and II

---

Definitions:

Historical Rates

Exchange rates used for the conversion of items on the financial statements that have remained unchanged from past to present.

Foreign Subsidiary

A company owned or controlled by another company, the parent company, that is based in a different country than the subsidiary.

Functional Currency

The functional currency is the main currency used by a business or economic entity, reflecting the primary economic environment in which it operates.

Opening Inventory

The value of the goods available for sale at the beginning of an accounting period.