Explain the significance of the unit of account function of money

Measure of value/unit of value: – Measurement of value was very difficult in the barter system. One good was valued in terms of the other. There was no common unit of value; the introduction of money has removed this difficulty. Now each good is valued in terms of money or the price of each good is expressed in terms of money.

For example– if the price of sugar is Rs 30 per kg. and that of wheat is Rs 10 per kg., then one kg. of sugar is worth 3 kg. of wheat.

Significance:-

• Expressing the value of each commodity in terms of quantities of other goods can be avoided.
• Accounting has become simple and easy.