Which of the Following Statements Is True

question 20

Multiple Choice

Which of the following statements is true?

• A) One of the limitations of using money is that it does not allow for the transfer of purchasing power into the future.
• B) The necessary condition required for money to function as a medium of exchange is that it also needs to be a store of value.
• C) The hours of labor that go into producing a product are a better unit of account than paper money.
• D) When money is used as a yardstick to describe the price of various goods and services, it serves as a store of value.

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Definitions:

FASB

Financial Accounting Standards Board, an independent nonprofit organization responsible for establishing accounting and financial reporting standards for companies and nonprofits in the United States.

Financial Statements

Reports that summarize the financial performance and financial position of a business, including the balance sheet, income statement, and cash flow statement.

Impaired Asset

An asset that has a market value significantly below its carrying amount on the balance sheet, indicating that recoverable amount is less than its book value, necessitating a write-down.

Depreciation Expense

The monetary value reduction in an asset's cost over its useful life due to wear and tear, age, or obsolescence.