Unit of account
Money function / From Wikipedia, the free encyclopedia
This article is about the economic principle. For the Chilean currency, which translates to "unit of account", see Unidad de Fomento.
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 formulation of commercial agreements that involve debt.
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Money acts as a standard measure and a common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems.