BARTERING

to barter is to exchange goods and
services without using money

    Examples of a barter
  • A farmer buys lumber from the sawmill.
  • He pays for it in flour, cheese and butter.
  • The workers at the sawmill are paid with the goods that the farmer gave.
  • The workers take the goods they do not need to the general store and trade for something else (maybe coffee and sugar).
BARTERING - DEBIT and CREDIT

People got their money's worth of goods from the store. The goods they brought in were "credited" to their account. The goods they took were "debited" from their account.

    Examples of debit and credit
  • A farmer gives the storekeeper 5 chickens, 50 eggs and a basket of apples.
  • The storekeeper gives the farmer coffee, tea, scissors, a lamp and coal oil.
  • The goods that the farmer brought are worth more than what he took from the store. The farmer brought in 3 extra chickens.
  • The storekeeper marks down a credit in his books for the 3 chickens.
  • The next time the farmer comes to the store he will be able to get more goods that are worth the same as the 3 chickens.

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J.Giannetta, Dec/04 (updated 2011)