Monetary Unit assumption
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Mom, can I give Lily 15 candy bars in exchange for the teddy bear?
I love it
Mom, this is the bill I just made
Each candy is $1.
Emma, you can't write on your accounting book that the doll cost you 15 candies. You should write down the price of the doll. How much is the candy?
Then you have to put $15 under cost for the doll.
Oh, I see
Remember that everything recorded in the books can be measured in monetary units.Although the doll is bought with candies, you have to record its monetary price on your books.