Money Is Still Useful During Times of Inflation Because

question 300

Multiple Choice

Money is still useful during times of inflation because

• A) it still retains the characteristic of predictability of value.
• B) more money can be made so people can still purchase the goods and services they want.
• C) it is not a liquid asset.
• D) its opportunity cost falls as inflation rises.

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Definitions:

Expense Recognition Principle

An accounting principle that expenses are recognized and recorded when they are incurred, regardless of when cash payments are made.

Expenses

Costs incurred in the operation of a business to earn revenue, including operating and non-operating expenses.

Revenues

Income that a business receives from its normal business activities, usually from the sale of goods and services to customers.

Asset Account

An account that represents a resource owned or controlled by a company that is expected to provide future economic benefits.