When Economists Refer to the Role of Money as a Unit

question 68

Multiple Choice

When economists refer to the role of money as a unit of account, they mean that

• A)most accounting systems reflect that goods are purchased with currency.
• B)most accounting systems reflect that goods are purchased with checks.
• C)money gives traders a way of measuring value in the economy.
• D)money makes it possible for specialization to take place.

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Definitions:

Depreciation

The allocation of the cost of a tangible asset over its useful life, reflecting its loss of value over time.

Supplies Expense

Costs associated with the consumable items used during a company's operations over an accounting period.

Journalized

The process of recording transactions in a company's journal as part of the accounting system.

Adjusted Trial Balance

A listing of all company accounts that will appear in the financial statements after adjusting entries have been made, verifying the equality of debits and credits.