Ch1-L2: the concept and development of money Flashcards
what are the origins of the word “money” and their meaning?
- Latin word “moneta”
- surname of the Roman goddess Juno (the guardian
of the finances of Roman Empire)
- Moneta refers to a mint or a place for coining money. - Old French “monoie” & Modern French “monnaie”
- meaning money, coin currency, or change. - Latin term “monere”
- meaning advise or warn. - In Ancient Greece “moneta”
- meant advisor, one who warns, or makes people remember.
what is another term for money and what does it mean
“bucks”
- which came from the word “buckins”
> meaning “deer hides,” a medium of exchange used
by settlers during the early times.
according to m_______________ money is defined as?
Merriam-Webster
- as something generally accepted as a medium of exchange , a measure of value , or means of payments.
money is commonly defined as anything…?
- as anything
> authorized by law to be generally accepted as legal tender,
> as a medium of exchange , and
> a standard value in payment of goods and services (without reference to the general standing of the person who offers it.)
according to b__________________ legal tender consist of _________________of a country’s currency that by law must be accepted as a __________________________________ and__________________________.
Business Dictionary.com
- consist of a denomination of a country’s currency that, by law must be accepted as a medium for commercial exchange and payment for a money debt.
While all denominations of the ___________________________are usually_______________, the denomination and amount in coins acceptable is ___________________________________________________.
While all denominations of the circulating paper money are usually legal tenders, the denomination and amount in coins acceptable is legal tender vary from country to country.
___________________________ are not legal tenders and are accepted only at the option of the ____________, __________, or ___________, also called ________________.
Checks and postal orders are not legal tenders and are accepted only at the option of the creditor, lender, or seller , also called lawful money.
From the foregoing definitions of money, it can be noted that money is?????? (5 functions of money?)
[MLM MS]
- medium of exchange;
- legal tender;
- measure of value;
- means of payment; and
- standard value.
Coinage is the?
conversion of metals into coins of a fixed
weight.
The place where metals are made into coins is known as?
mint
Money in the form of __________ became ___________________________________________ and, later, a ________________________________________________.
Money in the form of coins became a convenient commodity for exchange transactions and, later, a convenient tool for comparing and storing values
A coin is an _________ of metal, the _________ and ______________ of which are certified by the ______________________________________________________
A coin is an ingot of metal, the weight and fineness of which are certified by the integrity of the design on its surface and the power of the issuing authority.
The _________________ is the only authority granted the power of __________ and, ultimately, the power to __________ bills as money. This is an essential step in any ______________________.
The government is the only authority granted the power of coinage and, ultimately, the power to print bills as money. This is an essential step in any monetary system.
With the government’s sole authority to mint coins and print bills, the following basic purposes are assumed:
- Prevent confusion
- Ensure uniformity and fineness (ration of weight of pure metal to total weight, expressed in decimal or carat) of coins
- Facilitate exchange
- Ensure confidence on the part of the citizenry with respect to the government’s monetary system.
It is for these reasons that the fundamental law or the constitutions of any country grants the power to mint coins and print bills to its government alone, usually vested in its central bank.
In the Philippines, the power to mint coins and print bills is vested in the?
Bangko Sentral ng Pilipinas (BSP)
who ensures stability in the Philippine monetary system?
the BSP
who is the current Governor of the Bangko Sentral ng Pilipinas/Officeholder
Eli M. Remolona, Jr.
any private coinage is considered?
counterfeit
The government has made it difficult for coins to be counterfeited.
as of Feb 2014 how much is the Cost of the coinage(???????)
P0.76 per 1c to P1
Denomination = Unit cost
1-sentimo = P 0.9434
5-sentimo = P 0.4798
10-sentimo = P 0.4782
25-sentimo = P 0.7419
1-piso = P 1.1825
5-piso = P 3.4663
10-piso = P 4.4128
____________ money is ____________ than coins, making it more _____________
Paper money is lighter than coins, making it more portable
To _______________________ , the government issued __________ money to represent certain quantities of _____ or ________ kept by the government to cover _________________.
To facilitate exchange , the government issued paper money to represent certain quantities of gold or silver kept by the government to cover what has been issued.
Paper money can be called ___________________________ , following the ______ use of _______________ money.
Paper money can be called representative paper money, following the long use of commodity money.
Representative money was late replaced by what is
termed ________________.
fiat money
Plastic money is made of ______________.
polymer
Plastic money is actual cash made of ________________________________________
Plastic money is actual cash made of super resistant
polymer film (instead of paper)
______________ money feels like regular paper bill, but lasts longer.
polymer
When holding up a local plastic bill to a ________, a _________________________________________ can be seen. This confirms that the bill was printed on _______________________.
- light
- small see-through window
- clear plastic film
The polymer used for manufacturing _________ money is as _________ and ________ as ______________ money.
The polymer used for manufacturing foreign money is as thick and rigid as American money.
Polymer is more ____________, ______________________, and _______________________.
Polymer is more durable, harder to counterfeit, and
environment-friendly.
The ______________________ used in everyday exchange
transactions in place of actual bank notes are called?
- hard plastic cards
- plastic money
enumerate the types(/classification) of Plastic Money [4 CDCP]
- Credit Card
- Debit Card
- Cash Card
- Prepaid Cash Card
________________ allows owners to buy products on credit from different stores and establishments, in _______ of cash or money, except that it ________________________, that is, the ____________________________________ to the credit card.
Credit Card allows owners to buy products on credit from different stores and establishments, in lieu of cash or money, except that it has a credit limit, that is, the maximum amount that can be charged to the credit card.
give three examples of credit cards
- American Express
- Visa Card
- Master Card
Banks and other financial institutions issue Visa Cards or Master Cards that bear their name like BDO, Metro Bank, RCBC, East West Bank, among others.
Banks and other financial institutions issue Visa Cards or Master Cards that bear their name like BDO, Metro Bank, RCBC, East West Bank, among others.
The bank where the account is maintained issues the debit card.
The bank where the account is maintained issues the debit card.
payment using a _______________ are immediately charge to the ____________________________, instead of paying the card at a later date.
- debit card
- cardholder’s bank account
with what classification of plastic money can the holder purchase goods or services up to the amount that is in the account to where it is linked?
debit card
In some instances, if the bank gives an ______________, the holder can purchase up to the extent of the ______________ given him.
overdraft line —- if you have an unexpected shortage of funds, your overdraft line of credit covers transactions that exceed the balance in your checking account.
refers to the credit (up to a certain
limit) granted by the bank to the holder of the card.
The overdraft line
example:
Assuming the holder only has P 5,000.00 in hi account with the bank. If the bank grants him, say, an overdraft line of P 2,000.00 , the holder can buy up to P 7,000 using his debit card.
What is included in a debit card?
- ATM card number
- Expiration date
- ATM cardholder/owner
(4. Chip)
________________ only allows withdrawal of money through an _________.
- Cash card
- Automated Teller Machine (ATM)
In short, it is used for ATM transactions only.
A ______________ can be used as _______________ as well.
cash card
debit card
It is convenient in that the other holder need not
stay in line inside the bank to withdraw money.
cashcard
ATM are located in various locations, such as?
- outside or inside the bank,
- at department stores,
- and alongside roads.
true or false?
ATM card can’t be used for depositing money to the account supporting the card in an ATM.
false
- ATM card ((can)) also be used for depositing money to the account supporting the card in an ATM.
_____________________ is paid by the buyers upon purchase.
Prepaid cash card,
cash card includes/can be a? (examples/types of cash card)
- Gift Card/Certificate
- Store Card
- Multi-currency Prepaid Card
______________ is a _______________ that can be given as gifts so that the recipients can choose what
they want as a gift.
Gift card is a prepaid cash card that can be given as gifts so that the recipients can choose what
they want as a gift.
true or false? (explain)
gift cards can’t be used by financial institutions and can be only be used by certain stores, just like a debit card; the amount that can be spent is flexible. Once fully used, you can still deposit after.
false
gift cards ((can also)) be used by financial institutions and can be used at ((any store)), just like a ((credit)) card; however the amount that can be spent is ((fixed)). Once fully used, ((it has no value at all.))
true or false?
Very seldom can gift cards be reusable or topped up.
true
example of gift card
- Apple Gift Card
- SM Gift Card
________________ is like a ______________, generally issued by a ______________ and can be used for purchase in the _____________.
Store card is like a credit card, generally issued by a particular store and can be used for purchase
in the same store.
This is exactly the same as the prepaid cash card
discussed in the previous section.
store card
true or false?
Store cards can often be used in other establishments.
false
Very seldom can store cards be used in other establishments.
This is a simple credit granted by stores to encourage customers to spend more in their store. (store loyalty)
store card
example of store card
- Starbucks store card
- SM Advantage card
- Watsons store card
-Mercury drug sukicard
______________________________ can load up to ____ different currencies. What are those currency?
Multi-currency Prepaid Card can load up to six different currencies—-US dollar, Euro, British pound, Hong Kong dollar, Australian dollar , and Japanese Yen.
It can be used from all Visa-affiliated merchants here in the Philippines and abroad regardless of the currencies loaded.
Multi-currency Prepaid Card
Multi-currency Prepaid Card can be used for __________________________terminals. It has locked in exchange rate for currencies loaded.
Multi-currency Prepaid Card can be used for purchases of point of sale (POS) terminals. It has locked in exchange rate for currencies loaded.
true or false?
Prepaid cards can also withdraw local currencies from all Visa affiliated ATMS worldwide.
false
Prepaid cards –> Multi-currency Prepaid Card
All purchase would require the client’s signature.
Multi-currency Prepaid Card
enumerate the Major Types Of Money: [C³BMW]
- Commodity Money
- Currency (Bills And Coins)
- Check
- Bank Draft
- Money Order
- Warehouse Receipts (WR)
When things are used to get what we want, be it goods or services, the things we used to pay for such is called?
Commodity Money
true or false?
Commodity money can only be used as money.
false
Commodity money has it own value other than using it as money.
Currency / Bills and Coins
- The government of any country issues currency that is legal tender in the country.
These bills and coins are in different ________________, _____________ and ____________, by the______________ of a country.
These bills and coins are in different denominations, minted and printed, by the central bank of a country.
what can only be used in its country of origin?
Domestic currency
(If it used in another country, it needs to be exchanged with the currency of that country.)
_____________________ can be exchange with a currency that is acceptable internationally, like _____________.
Domestic currency can be exchange with a currency that is acceptable internationally, like US dollar.
_____________ is generally used by businesses and persons in conducting businesses, as well as personal transactions.
Check
____________ is a written order to a ______ (________), by the person, who __________ the check (________________) to pay someone whose _________ is written on the face of the check (__________) a certain amount of money on demand (_________________________________) or at a ________________ (____________________).
(check) It is a written order to a [bank (drawee)], by the person, who [issues] the check [(maker or drawer)] to pay someone whose [name] is written on the face of the check [(payee)] a certain amount of money on demand (upon presentation/immediately) or at a [future date (post-dated check)].
enumerate the Different Types of Checks [PBCCT]
- Personal Check
- Business Check
- Cashier’s Check/Manager’s Check
- Certified Check
- Traveler’s Check/ Traveler’s Cheque
_____________________ is issued by persons to be drawn against their own current/checking account in a bank.
Personal check
A check is withdrawn from the _______________________.
checking account.
The check has?
The check has:
- the date issue or a later date,
if post –dated, it has:
- the name of the payee,
- the amount in words and infigures, and
- the signature of the maker or owner of the check.
_____________________ is generally non-interest bearing, while ___________________ is interest bearing.
Checking account is generally non-interest bearing , while savings account is interest bearing.
_____________________ is a check issued by companies/business. It is drawn on the ______________________________ or ______________________
Business Check is a check issued by companies/businesses. It is drawn on the issuer’s bank checking account or current account.
It is used for business transactions.
Business Check
Treated as a bank draft, it is issued by the bank
against ___________________, ensuring ___________________________
- Cashier’s Check/Manager’s Check
- against its own account
- availability of funds.
It is to be purchased with a fee from a bank that issues the check.
Cashier’s Check/Manager’s Check
If you are to purchase a cashier’s check for say
P1,000.00 you give the banks P1,000.00 plus any fee the bank will charge. If the total fees and charges are, say P100, you give the bank P1,100 and the bank will issue you a cashier’s check for P1,000 that you will use to pay somebody else, even a company.
It can be signed by the bank cashier or any other bank official.
Cashier’s Check/Manager’s Check
________________________ is like a cashier’s check. However, it is issued by the bank certifying that the
account of the person issuing it has available funds (just like any ordinary personal check)
Certified check
The bank certifies the availability of fund by ______________ the corresponding amount on the check which ________________________________________.
The bank certifies the availability of fund by earmarking the corresponding amount on the check which can only be used to pay the check itself.
Certified check _________ or ________________ and is easier to ___________ than _____________ checks.
Certified check clears or negotiates faster and is easier to encash than personal checks.
People who travel and who do not want to go into the hassle of exchanging their currency with the currency of the country they are visiting bring them.
traveler’s check (also written as traveller’s check,
traveler’s cheque, or travellers cheque)
It is a ____________________check which is______________, allowing the signatory of the financial institution who is selling the traveler’s check to make an ________________ payment to whoever has the traveler’s check in his possession.
It is a fixed amount check which is pre-printed, allowing the signatory of the financial institution who is selling the traveler’s check to make an unconditional payment to whoever has the traveler’s check in his possession.
It is like a check payable to cash or an on-demand draft or sight draft because it is payable on demand or upon presentation.
traveler’s check
The purchaser of the ________________ check should immediately __________________ it for _____________ in case of ________.
The purchaser of the traveler’s check should immediately endorse (sign) it for protection in case of loss.
_______________ is issued by banks against their own account. At times, they are called ___________________ or ____________________
- Bank Draft
- cashier’s check or manager’s check.
Like _________ and ________________, bank drafts ensure ______________________ without any need to check on the ______________ of the person issuing the check.
Like certified and cashier’s checks, bank drafts ensure availability of funds without any need to check on the character of the person issuing the check.
To get a bank draft, a customer goes to the ______ to request it. (after making sure of the funds) The ______ then issues the draft.
bank
The bank will ensure that the customer has __________________________ (if he has an account with the bank where the funds will come from) or ____________________________________________________ the draft plus all pertinent bank fees.
The bank will ensure that the customer has enough money in the bank (if he has an account with the bank where the funds will come from) or presents enough cash to cover the amount of the draft plus all pertinent bank fees.
enumerate the Types of Bank Draft: [5 DTLIA]
- Demand Draft
- Time Draft
- Local Draft
- International Draft
- Automatic Bank Draft (ABD)
__________________refers to the instrument issued generally by the ________________ of a country ordering a sum of money to be paid to the payee indicated on the instrument itself.
Money order refers to the instrument issued generally by the post office of a country ordering a sum of money to be paid to the payee indicated on the instrument itself.
What R.A. states that the Philippine Postal Corporation has the power to issue _______________ or checks for transmittal through the mails and authorized the issuance of a ______________ in cases of ______, ___________, _______, or ____________ money order or _______.
In the Philippines under R.A. 7354, an Act Creating the Philippine Postal Corporation under Art. II, Sec. 6, (d)
- states that the Philippine Postal Corporation has the power to issue money orders or checks for transmittal through the mails and authorized the issuance of a replacement in cases of lost, stolen, stale, or destroyed money order or check.
It covers all warehouses, whether public or private, bonded or not.
The Warehouse Receipts Act (Act No. 2137) was enacted to a full and complete treatise on the
subject .
______________________ is a document of title to goods used as __________________________ of the goods covered by the receipt and an authorization to the possessor or the warehouse receipt to transfer or receive either by endorsement or by delivery of goods represented by such warehouse receipt.
A warehouse receipt is a document of title to goods used as proof of possession or control of the goods covered by the receipt and an authorization to the possessor or the warehouse receipt to transfer or receive either by endorsement or by delivery of goods represented by such warehouse receipt.
The warehouse receipt system has a long history
of use in ______________________.
trade and finance.
give 3 advantages of using check instead of cash
- easier/more convenient to carry around (lighter)
- much safer than carrying large amounts of money
- for easier transaction
stale check
- 180 days (w/ week ends) from the issued date of the check
- an expired check
post-dated check
can withdraw after 5-10 years(?)
late check
- deposited after past 3pm
- then after 2-3 days palang ma-wi-withdraw
early check deposit
- deposited before 3pm
- then 1 day after ma-wi-withdraw mo na
11 am
issue time of checks(?)
crossed check
any check that is crossed with two parallel lines, either across the whole check or through the top left-hand corner of the check. This double-line notation signifies that the check may only be deposited directly into a bank account
how much is a personal checkbook
250-270 pesos
50pcs
how much is a business/commercial checkbook
500-520 pesos
100pcs
give 5 parts of the check
- check number
- issue date
- amount (in words)
- amount (in numerical form) (/in figures)
- (account holder’s) signature
- name of payee
- bank name
