Money Is Functioning as a Medium of Exchange When You

question 18

Multiple Choice

Money is functioning as a medium of exchange when you:

• A) Buy lunch at a fast food restaurant for yourself and your friend.
• B) Use it to compare the cost of a steak dinner to the cost of a hamburger.
• C) Decide to save your cash for gas and eat leftover pizza for dinner.
• D) Borrow a DVD from your friend and she borrows your textbook.

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Definitions:

Debit

An accounting entry that increases asset or expense accounts, or decreases liabilities or equity accounts, recorded on the left side of an accounting ledger.

Merchandise Inventory

Goods and products that a retailer or wholesaler has on hand to sell to customers.

Buyer

A person or organization that purchases goods or services for personal use or consumption.

Asset

Assets possessed by a corporation that hold financial worth and can yield advantages in the future.