Turkey and currency

Cannot comment on your other questions other to say, It is true. Lots of places don't like well used money. I am suspicious that they might think it is fake. Also, have been told (no personal experience) that $50 US bills are not appreciated either. The 50 is the most counterfeited bill in US currency. If using something other than Turkish money, be sure you know the current exchange rate.

Yes, credit cards are widely accepted in Istanbul. Some vendors will prefer cash, especially for smaller purchases. I found some vendors in the Grand Bazaar for whom their "best price" was cash only.

Depending on how much they cater to cruise ship passengers, vendors may accept dollars or euros. I did see prices in high tourist areas listed in euros, but the credit card transactions were the usual option of currencies, where it was better to decline the DCC option (which let's the vendor's system set the exchange rate) and paying in Lira was the better rate.

I got small amounts of cash, as needed, from ATMs in Istanbul and used Turkish Lira for every cash purchase.

With the exception of a taxi driver I found at the end of the bus line from the airport, no one ever asked me for dollars or euros last fall, and I was in Istanbul and Bursa for a month. I only used lira except for that one taxi ride (which was very over-priced, as expected).

The street vendors selling cheap food items are almost certainly not set up to accept credit cards. Some casual restaurants either didn't take cards, pushed me for cash though they supposedly took cards, or had a card terminal that choked on my US credit card. In addition, it's always good to have some cash for restaurant tips.
I made sure I always had some lira with me.

Many of the ATMs in Turkey charge fees. I found two that didn't (I'm sure there are more): Ziraat Bank and the machines at/near post offices. It's not unusual to come across a phalanx of ATMs from a bunch of different banks, often near a major tram stop. Ziraat Bank may be represented there, but not always.

The Turkish lira continues to lose value. Don't withdraw a lot of money from an ATM unless you have a specific need for it.

The prior answers cover most of it. I will add if prices are posted in dollars/euros/lira then you can assume a business will take your USD - if not, you can ask but be prepared for a no. I only remember seeing prices posted in multiple currencies in the bigger bazaars and large stores in Istanbul and in Kusadasi where cruise ships dock. As Frank noted you should have a current exchange rate table handy (print one out or a phone app) but remember it costs a business to convert foreign currency back to lira, so it will not be a completely even exchange. BTW I took a private tour where the guide specifically asked for payment in US dollars (they knew I was American) and I paid for an airport shuttle pick up in Euros (that company's preferred currency). I was told it was acceptable to tip the shuttle driver in dollars, euros, or lira. However tips for everything else (Turkish baths, waiters, etc.) should be in cash lira only, and note everywhere I went you could not put a tip on credit card.

Plan to use the ATM to withdraw money as you go. With inflation as it is, and the fact that the biggest Turkish lira bill is a 200 note (approx. US$6.50), you're probably going to need to go more than once. I never did get used to the wad of bills in my wallet! There's a great post from CWSocial on the ins and outs of all sorts of issues including ATMs, check it out.

Some may disagree with me, but I wouldn't use euros or US dollars in Turkey. Use a card when you can in major cities, otherwise have some Turkish lira.
Turkey is not a part of the EU , so having some Turkish lira on hand is quite useful. Just make sure you understand their currency.
Turkish businesses may prefer other currency (who can blame them), but you don't have to use euros or US dollars. I've never had anyone in Turkey require it.

Most of the large US banks (likely Canadian banks as well) have an international partner ATM relationship with European banks, where some of the cash withdrawal fees may be reduced or eliminated if you use that partner bank's ATM. For example, when I arrive Scotland and Turkey in March, I will be looking for a Barclay ATM in the UK and a TEB ATM in Turkey to make my withdrawals--because that's who my bank has a relationship with. You can google your bank's name+ATM+international and you should find this information for your bank and which of the fees may be waived/reduced. I have done this on trips to other countries and it's worked for me.

BTW I took a private tour where the guide specifically asked for payment in US dollars (they knew I was American)

LOL! That would be a big problem for me. I rarely carry cash here in the US, and certainly make no effort to take any with me to Europe anymore. (Way back, I used to have $200 or so in 20s in my money belt as an emergency stash...but then I also used to carry Travelers Checks). I'm afraid my response would have been "take Lira or nothing"

Lots of bits of truth above, but lets cut to the chase: it's a foreign country. They have their own currency and that's what they use. Most people and most businesses in Turkey do not want foreign currency, any more than a sandwich shop in your home town would want someone to come in and try to pay for their meal with Turkish Lira. So generally, in Turkey you should be prepared to deal with Turkish Lira.

Yes, there are exceptions: businesses that deal entirely or largely with foreign tourists may have prices posted in foreign currency - though rarely in US Dollars. Usually Euros, sometimes Russian Rubles, and occasionally UK Pounds - it depends on the location and what kind of tourists they get there (in Antalya, sometimes called "Cuncun for Russians", we saw plenty of menus in restaurants with prices in Rubles; in other holiday towns where British expats dominate, we saw bars with prices in Pounds). As a rule of thumb, if I see prices in some foreign currency, I figure it's a bad deal.

Those places may grudgingly accept or actually want Euros (and maybe some other currencies) will give you a horrible exchange rate to compensate themselves for the inconvenience, so you are pretty much always better off paying in the local currency. Yes, inflation is bad there, but unless your trip to Turkey is very long, it won't impact you.

The one business I saw that wanted nothing to do with Turkish Lira were the balloon operators in Capadocia - they insisted on payment (in cash) in Euros or Dollars. Other than those guys, I don't recall ever seeing a business openly offering to take US Dollars.

Bottom line: Yes, you will need some cash. That cash should be what everybody else is using: Turkish Lira. Personally, I try to put everything I can on a credit card (important detail: one that doesn't charge a foreign transaction fee), and always, always make sure the system is charging you in the local currency, not offering you the "convenience" (a v-e-r-y expensive convenience) of paying in your home currency.

When in Rome...pay in Euros. When in Turkey...pay in Turkish Lira.

@Fiola94093- if you are looking for a Barclays ATM in Scotland then do your homework on their website beforehand. All the major banks are closing branches very fast, but Barclays are particularly aggressive in their pace of closures.
You are not going to find that an easy task unless you know which branches are still open, as close to your travel date as possible.