Answered: Define fungibility, and explain why it…

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter17: Other Services Provided By Audit Firms

Section: Chapter Questions

Problem 59RSCQ

See similar textbooks

Related questions

Question

Define fungibility, and explain why it matters in financial decision
making.

Expert Solution

Step 1

Fungibility: Something which is fungible is easily substitutable or exchangeable. Fungibility exists in many widely traded commodities. A tonne of copper or a barrel of oil may be substituted for another tonne of copper or another barrel of oil. Money is the clearest definition of a fungible entity. A dollar is a dollar, whether it was given to you, found on the street, or won by hard work. Whether that's a dollar bill in the pocket, 20 nickels in a jar of spare change, or even a number on the computer while checking the bank balance online, a dollar is a dollar. It's just worth the same. Money has the feature of being fungible.

Step by step

Solved in 2 steps

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions