To the Extent That Money Serves as a Medium of Exchange

question 356

Multiple Choice

To the extent that money serves as a medium of exchange

• A) it benefits both buyers and sellers.
• B) it reduces transaction costs.
• C) it eliminates the need for barter.
• D) All of the above are correct.

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Definitions:

Useful Life

The estimated time period that an asset is expected to be used before it is fully depreciated or deemed no longer useful.

Depreciation Expense

An accounting method of allocating the cost of a tangible asset over its useful life to reflect its decrease in value over time.

GAAP

Stands for Generally Accepted Accounting Principles, which are a common set of accounting standards and procedures that companies must follow when they compile their financial statements.

Accounting Estimate

Approximations or judgments made by management when preparing financial statements, due to uncertainty in determining the exact amounts.