Amounts of money can be added or subtracted only if they are at the same point in time.

Question

Quizplus · Accepted Answer

This is an application of the time value of money principle, which states that the value of money changes over time due to factors such as inflation, interest rates, and opportunity costs. Adding or subtracting amounts of money at different points in time would not take into account these changes in value and would therefore be misleading.

Amounts of Money Can Be Added or Subtracted Only If