Accountants are taught that there are only two fundamentally different items in the economy, namely, monetary and non-monetary items.
That is wrong.
There are three fundamentally different items in the economy:
1. Monetary items
2. Variable real value non-monetary items
3. Constant real value non-monetary items
Monetary items are money held and items with an underlying monetary nature.
Examples of monetary items in today’s economy are bank notes and coins, bank loans, bank account balances, treasury bills, commercial bonds, government bonds, mortgage bonds, student loans, car loans, consumer loans, credit card loans, notes payable, notes receivable, etc.
To be continued ......
© 2005-2010 by Nicolaas J Smith. All rights reserved
No reproduction without permission.
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