Common
Unit of account
Standard numerical measure used to value and compare goods and services
Unit of account
In economics, unit of account, sometimes called currency unit or monetary unit, is a standard unit of measurement of the market value of goods, services, and other transactions. Also known as a measure of relative worth and a standard of deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt. It is one of the functions of money. it is a basis for quoting and bargaining of prices and it is necessary for developing accounting systems. A given base unit of account (analogous to base unit of measurement) may have derived units of account or subunits; for example, one cent equals a hundredth (1⁄100) of a dollar or other base units of many currencies. Unit of account in economics allows a somewhat meaningful interpretation of prices, costs, and profits, so that an entity can monitor its own performance. It allows shareholders to make sense of its past performance and have an idea of its future profitability. The use of money...
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