Money

_MONEY_

Money is anything that is generally accepted as payment for goods and services and repayment of debts.^[1] The main functions of money are distinguished as: a medium of exchange, a unit of account, a store of value, and occasionally, a standard of deferred payment.^[2][3]

In small communities, a "money" may be something that functions as such, by being generally accepted in payment of debts. However, as the size of a community increases, no commodity will be generally accepted by all, and it requires the force of law for any one specific type of money to be an acceptable payment for any debt by anyone. Thus, all modern monetary systems at the national level are based on fiat money – money without value as a physical commidity, but deriving value by being declared by a government to be legal tender, that is, it must be accepted as a form of payment within the national boundaries of the country, for 'all debts, public and private'. By law, the refusal of a legal tender (offering) extinguishes the debt in the same way acceptance does.

The money supply of a country is usually held to consist of currency (banknotes and coins) and 'deposit money' (the balance held in checking accounts and savings accounts). These demand deposits usually account for a much larger part of the money supply than currency.^[4][5] Deposit money is intangible and exists only in the form of various bank records. Despite being intangible, deposit money still performs the basic functions of money, as checks are generally accepted as a form of payment and as a means of transferring ownership of deposit money.^[6]

More generally, the term "price system" is sometimes used to refer to methods using commodity valuation or money accounting systems.^[7]