People Use Money as a Medium of Exchange When They

question 19

Multiple Choice

People use money as a medium of exchange when they:

• A)hold money to transfer purchasing power into the future.
• B)use money as a measure of economic transactions.

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Definitions:

Maker

In financial terms, the maker is typically the person who creates or signs a promissory note, thereby agreeing to pay the note’s value at maturity.

Notes Receivable

Represents claims against others, recorded by promissory notes, for money to be paid to the company.

Journal Entry

The recordation of a financial transaction in an accounting system, showing the accounts and amounts debited and credited.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of accounts receivable that may not be collectible.