This is used to talk about a singular countable noun or an uncountable noun that is close to you.
That is used to talk about a singular countable noun or an uncountable noun that is far from you.
- This cat is happy.
(the cat sitting close to you) - That balloon is floating away.
(the balloon far away from you in the sky) - This food is delicious.
(the food in front of you) - Do you remember that furniture we saw on the fifth floor?
(you are now on the first floor of the shop)
