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In economics, unit of account is one of the functions of money. A unit of account [1] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the ...
A unit of account (in economics) [25] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt.
Apart from cash, legal tender issued on the fiat of a sovereign government, [12] [13] examples of assets used as potential stores of value are: Financial assets, e.g. stocks, bonds and other fixed income investments, investment funds, private equity; Real estate, e.g. home-ownership, rental property, or through financial securities or ...
The money measurement concept (also called monetary measurement concept) underlines the fact that in accounting and economics generally, every recorded event or transaction is measured in terms of money, the local currency monetary unit of measure. Using this principle, a fact or a happening or event which cannot be expressed in terms of money ...
A unit of measurement that applies to money is called a unit of account in economics and unit of measure in accounting. [5] This is normally a currency issued by a country or a fraction thereof; for instance, the US dollar and US cent (1 ⁄ 100 of a dollar), or the euro and euro cent.
Money also functions as a unit of account, providing a common measure of the value of goods and services being exchanged. Knowing the value or price of a good, in terms of money, enables both the supplier and the purchaser of the good to make decisions about how much of the good to supply and how much of the good to purchase.
In accounting, there is a different technical concept of cost, which excludes implicit opportunity costs. In common usage, as in accounting usage, cost typically does not refer to implicit costs and instead only refers to direct monetary costs. The economics term profit relies on the economic meaning of the term for cost.
Functional currency refers to the main currency used by a business or unit of a business. It is the monetary unit of account of the principal economic environment in which an economic entity operates. International Accounting Standards (IAS) [1] and U.S.