What Is the Equation of Exchange? What Are the Variables

question 133

Essay

What is the equation of exchange? What are the variables, which are in it, and how do they relate to each other?

---

Definitions:

Net Book Value

The value of an asset as recorded on the balance sheet, calculated by subtracting accumulated depreciation or amortization from the asset's original cost.

Depreciation Expense

Distributing the expense of a physical asset over its life expectancy.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset over its useful life.

Unearned Revenue

Money received by a company for goods or services that have not yet been provided, recorded as a liability until the goods or services are delivered.