Use of Yap Stones on the Island of Yap Was

question 33

Multiple Choice

Use of Yap stones on the island of Yap was essentially a commodity-backed money

• A) employing Yap stone certificates issued by the Yap tribal council.
• B) which was problematic because the Yap stones were not in limited supply.
• C) whose record of ownership was recorded on stone tablets.
• D) whose record of ownership was stored in the collective memory of the islanders.
• E) which was easy to transport.

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Definitions:

Net Method

An accounting method where discounts for early payment are anticipated and recorded as reductions of the cost of purchases or an expense.

Discount Period

The time frame in which a payment can be made at a reduced rate from the total invoiced amount, typically to encourage early payment.

Periodic Inventory System

An inventory accounting system where updates are made on a periodic basis, not continuously.

Discounts Lost

Represents the extra amount paid by a buyer above the early payment discount price, due to missing the discount period.