Unit of Account - Explained
What is a Unit of Account?
Written by J. Mance Gordon
Updated at April 23rd, 2024
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What is a Unit of Account?
Third, money serves as a unit of account, which means that it is the ruler by which we measure values. For example, an accountant may charge $100 to file your tax return. That $100 can purchase two pair of shoes at $50 a pair. Money acts as a common denominator, an accounting method that simplifies thinking about trade-offs.
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