Money (pl. monies) is the term for a means of payment which is exchangeable for goods and services. In fact, money is a universally exchangeable good. Money as a payment method is accepted within a certain socio-economic-regional context (i.e. in a specific country, a specific region and within a specific community of people). Officially recognized monies take the form and the value of a concrete currency. Inside a market economy, money can be described with the help of the following further characteristics:
- Money is a unit and a measure of value (it expresses the value of services and goods)
- Money is a unit and a means of exchange
- Money is a general / universal means of exchange
- Money is a means of asset accumulation
Money in practice: In connection with the activities of an organisation money forms a part of its financial means. Money can either take the form of cash(bank notes and coins) or it may also be cashless or cash-free. In developed societies, the circulation of money in an economy is organized by the state. In business transactions, money is constantly received and spent by economic subjects; the flow of such monies has to be recorded in the books (the accounting system) of every organisation. Money is the asset with the highest liquidity, which in practice means that it has to be accepted as a medium of exchange by everybody.
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