What is MONETARY ITEM?

Anything that is valued as money. Monetary assets are cash and accounts receivable. Monetary liabilities are notes and accounts payable. These have a fixed exchange value with money unaffected by inflation or deflation. Money, and anything monetary gain or lose value only in terms of purchasing power. Rising prices lowers what money can buy. Monetary liabilities actually gain value when prices rise as their worth in money is at a time before prices rose.

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