This is used to talk about singular countable noun or an uncountable noun that is close to you.
That is used to talk about singular countable noun or an uncountable noun that is far from you.
- This cat is happy.
(the cat sitting next to you) - That balloon is floating away.
(the balloon high 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 on the first floor of the shop)