basic finance 1.1

• Money


  Anything that is authorized by law to be generally accepted as a medium of exchange and as standard of value within a given political territory at a given time
• Money


  Derived from MONETA = another name for JUNO (the wife of the highest Roman God Jupiter) in whose temple, the first money was coined
• Characteristics of good money

  • General acceptability
  • Portability
  • Durability
  • Divisibility
  • Cognizability
  • Stability of value
  • Scarcity
  • Security features
• Security features of Philippine banknotes

  • 200-, 500- and 1000-piso notes which changes color from red to green and bears the clear text of "BSP" and the denominational value on the obverse and "BSP" on the reverse, both in repeated series
  • Optically Variable Device (OVD) Patch: Found only in 500- and 1000-piso notes, this patch is a reflective foil, bearing the image of the Blue-napped parrot for 500-piso/clam with South Sea pearl for 1000-piso, changes color from red to green when the note is rotated 90 degrees
  • Optically Variable Ink (OVI): Found only in the 1000-piso note, this embossed denominational value at the lower right corner of the face of the note changes color from green to blue when viewed at different angles
  • Level II: Security features recognizable by professional cash handlers/bank tellers with the use of magnifying lens or ultraviolet light. Examples are fluorescent features and micro printing
  • Level III: Hidden or covert security features that are reserved for the use of the BSP
  • Level IV: Forensic security features which require special laboratory examination procedures and equipment for identification; most relevant in establishing the authenticity of a banknote in the course of any court proceedings
• NGC design


  • Matibay (strong)
  • Makulay (colorful)
  • Maganda (beautiful)
  • Malinis (clean)
• Functions of money


  • Medium of exchange
  • Standard of value
  • Store of value
  • Standard of deferred payment
• Medium of exchange


  The most important function of money because money facilitates exchange - for it is an instrument by which we can obtain the goods and services that will satisfy human wants
• Standard of value


  Money facilitates the measure of the relative value of goods and services for it is an instrument/yardstick by which we can measure the value of the goods and services that will satisfy human wants
• Store of value


  Money represents the value of goods that are produced and or services reserved by the owner. Such value is reserved up there for future use. This could be done by (a) saving and (b) investment. It is a reservoir of future purchasing power.
• Standard of deferred payment


  Money serving to measure the extent of obligations of borrowers and the extent of claims of creditors
• this stage is characterized by the barter system, which refers to the direct exchange of goods and services for other goods & services. BARTER came from the French word "BARATER" which means to "cheat or to trick". This implies that in every barter transaction, there is always one party that is cheated.
• BARTER STAGE


  this stage is characterized by the barter system, which refers to the direct exchange of goods and services for other goods & services. BARTER came from the French word "BARATER" which means to "cheat or to trick". This implies that in every barter transaction, there is always one party that is cheated.
• MONEY STAGE


  this stage uses money as the regular medium of exchange. MONEY -is defined as anything that is authorized by law to be generally accepted as a medium of exchange and as standard of value within a given political territory at a given time. MONEY was derived from MONETA = another name for JUNO (the wife of the highest Roman God Jupiter) in whose temple, the first money was coined.
• CREDIT STAGE


  this stage does not use cash mainly for its transactions but uses any of its legal substitutes such as: checks, drafts and acceptances. CREDIT - is the ability of a person to obtain goods, money and services in exchange for a promise to pay in the future. It is originated from the word "CREDITUM" = which means "TRUST". Therefore, it is evident that the first consideration in granting credit would be the presence of trust and confidence.
• MONEY

  • is defined as anything that is authorized by law to be generally accepted as medium of exchange and as standard of value within a given political territory at a given time. MONEY- was derived from MONETA - another name for JUNO (the wife of the highest Roman God Jupiter) in whose temple, the first money was coined.
• GENERAL ACCEPTABILITY


  This is the most important quality of good money because on it, depends its function as medium of exchange. It refers to already acceptance or receipt of money in the settlement of his claims.
• DURABILITY OF MONEY


  It refers to its quality to withstand the normal wear and tear when used in transaction, therefore, it is implied that BSP notes have an estimated life of five (5) years and coins for ten (10) years. (Sec.57 of RA # 7653)
• PORTABILITY OF MONEY


  This refers to its quality of being easily transferred from place to another for the purpose of settling any kind of transaction. Materials used, like metal alloys must not be bulky, for higher denominations, paper-based materials are preferable for easy transport.
• DIVISIBILITY OF MONEY


  This means that money could be divided into as many different smaller denominations to enable traders to settle any size of obligation or collect claims arising from their various transactions. (Sec. 48 of RA # 7653)
• COGNIZABILITY OF MONEY


  Money could be easily recognized, determined or distinguished from the counterfeit or fake money.