Definition of Money and Main Functions of Money

According to D.H. Robertson, "anything which is widely accepted in payment for goods or in discharge of other kinds of business obligations."
According to Crowther, "money can be defined as anything that is generally acceptable as means of exchange and that at the same time acts as a measure and a store of value."
There are four main function of money:

1.  Medium of exchange: It is the most important function of money because it avoids the double coincidence of wants. In the barter economy a great difficulty was experienced in the exchange of goods as the exchange in the barter system required double coincidence of wants. Money has removed this difficulty. For instance, A can sell his goods to B for money and then he can use that money to buy the goods he wants from others who have these goods. As long as money is generally acceptable, there will be no difficulty in the process of exchange. 
2. Measure of value or a unit of account: Money serves as a yardstick for measuring the value of goods and services and because of this the relative value of goods and services can be easily compared. For example, rupee is the basic unit of account in India for measuring the economic values. Almost all prices of goods, rent, wages, interest, prices of gold and silver and real estate are expressed and measured in rupees. 
3. Standard of deferred payments: Deferred payments mean those payments which are to be made in the future. If a loan is taken today, it would be paid back after a period of time. The amount of loan is measured in terms of money and it is paid back in money.
4. Store of value: Money being the most liquid of all assets. Though, there are other assets like houses,factories, bonds and shares in which wealth can be stored. But  money has the advantage that an individual of a firm can buy with it anything at any time. However this is not the case with other assets. Other assets like houses and shares have to be sold first and converted into money and only then they can be used to buy other things.