FORMS OF MONEY

LESSON 1

1. Commodity money
Commodity money is money whose value comes from a commodity of which it is
made. Commodity money consists of objects that have value in themselves as well as
value in their use as money. Examples of commodities that have been used as
mediums of exchange include gold, silver, copper, salt, peppercorns, large stones,
decorated belts, shells, alcohol, cigarettes, cannabis, candy, cocoa beans, cowries
and barley. These items were sometimes used in a metric of perceived value in
conjunction to one another, in various commodity valuation or price system
economies.

2. 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 denominations, minted and printed by
the central bank of a country. Domestic currency can only be used in its country of
origin, if used in another country, it needs to be exchanged.

3. Check
It is used by businesses and person in conducting businesses, as well as personal
transactions. It is a written order to a bank (drawee), by the person who issues the
check (maker/drawer), to pay for someone whose name is written on the face of the
check (payee) on a certain amount of money on demand or at a future date
(postdated check).

 Different kinds of check:

a. Personal Check
It is issued by the person to be drawn against their own current/checking
account in bank.

1
Foreign Check with its parts

1.Complete name and address pre-printed by the bank. (Depositors in the bank)
2. Current or future date
3. Bank ID number, the above 4-digit number is the check number
4. Payee for whom the check is issued
5. Amount in both figures and words
6. Bank name and address must be printed on the check.
7. The first figures represent the routing number; the second figures represent the
account number of the drawer.
8. Drawer’s (payer or issuer) signature.
At the back.
The address of the issuer is also indicated.
It can be encashed or deposited in account.
There is also a line to write what is the payment for.

2
 b. Business Check
It is a check issued by companies/businesses used for business transactions. It is
drawn on the issuer’s bank checking or current account.

c. Certified Check
It is issued by the bank certifying that the account of the person issuing has available
funds. The bank certifies the availability of fund by earmarking the corresponding
amount on the check which will only be used to pay the check itself.

Parties to a check
 Maker
It is the drawer or writer of the check. He is the payer/debtor, the one who owes
someone or some company. He is the depositor with a current account with the
bank where the funds will come.
 Drawee
The drawee is the bank which is ordered to pay the payee. It is the account
where the current account is maintained.
 Payee
It is the one whom the check is to be paid. He is the creditor and either deposits
it in his account with the drawee’s bank, in another bank or encash it to the bank.

d. Travelers Check
People who travel and who do not want to go into hassle of exchanging their
currency of the country they are visiting, brings travelers check. It is a fixed amount
check which is preprinted, allowing the signatory of the financial institution who is

3
selling the traveler’s check to make an unconditional payment to whoever has the
check’s possession.

Parties to a traveler’s check

 Issuer or obligator
The company issuing or producing the traveler’s check. The obligator or issuer is
both the maker and the drawee because he makes the final payment on the
traveler’s check, just as someone who issues his own check.
 Agent
The financial institution who sells the traveler’s check.
 Purchaser
The person buying the traveler’s check and will use it as a form of money.
 Payee
The seller of goods and services to be paid with the traveler’s check.

LESSON 2 FINANCE

It is derived from the Latin word “finer” meaning “to end” or “to pay “. When a
person pays his bill, the financial matter is ended. Economic activities like business
transaction, personal investment, or even simple borrowing entail finance or have
financial implications. Even the government needs to be financed for a country to
survive.

Medina (2007) defined finance as the study of the acquisition and investment of
cash for the purpose of enhancing value and wealth.

Therefore, finance is the function of:

1. Allocating available funds

2. Acquiring needed funds
3. Utilizing the funds to achieve set goals.

LESSON 3 CLASSIFICATION OF FINANCE

A. As to form of negotiation
1. Direct finance
According to Hadjimichalakises, direct finance is involved in direct borrowing. A
company going to a bank to obtain a loan is direct finance. Similarly, a friend
borrowing money from another is direct finance. The security acquired (direct
security) by the surplus unit (lender) is the same security issued by the deficit unit

4
(borrower). A direct security is a financial instrument a deficit unit issues and sells to
a surplus unit with or without the help of market specialist like the financial
intermediaries.

2. Indirect Finance

It involves financial intermediaries in the real sense of the word. Intermediaries

act as middlemen when they buy securities for resale or simply facilitate the scale
from the original issuers to the final buyers. Intermediaries buy securities for resale
to other investors or saving units. When a company issues bonds or stocks to
increase its capital, it goes to an investment banker (a financial intermediary), who
usually underwrites (sells) the issue.

B. As to User

1. Public finance
Public finance is the management of a country’s revenue, expenditures, and
debt load through various government institutions. Government expenditures for
infrastructure like building streets, schools, bridges, among others and payment of
government employees are government spending and thus public finance. When the
government issues treasury securities like Treasury bills, notes, and bonds, the
government is in fact borrowing money from the public. Like all other entities, the
government is both a borrower (deficit unit) and a lender (saving unit).

2. Private finance
All finance, other than public finance, is private finance. An individual borrowing
money from another individual, a company borrowing from financial institutions or
issues share of stocks and bonds are examples of private finance. It is further divided
into:

 Personal Finance
It refers to finance conducted by individuals/consumers. A family spending for
their food, clothing, shelter, recreation, education, among others is personal finance.
A father giving his son’s allowance, a sister borrowing money from another sister, an
aunt supporting her niece in her studies are all examples of personal finance. This
also includes individuals borrowing from financial institutions, and individuals
borrowing money in the bank all engage in personal finance.

 Finance of Non-profit organizations

It involves those conducted by charitable, civic, religious organizations, among
others. These organizations are not for profit, meaning, they do not aim to gain
profit or increase wealth. They could be for charitable purposes like thrift stores; for

5
religious purposes; for civic purposes like the Rotary Club; among others. They spend
for their operations and buy long term assets and invest any extra money that they
have. They construct buildings and spend for whatever activities they conduct.
Everything that they do involves funding is finance of non-profit organizations.

 Business Finance
It deals with financing for business firms or form commercial use, the goals of which
is to make profit. Businesses either produce goods and services for sale or buy goods
and sell the same. Where to obtain capital for a particular company and where to
use it are concerns of business finance. When a certain company buys the stocks of
another company because it has excess funds, or borrows money from the bank to
buy land, building, machinery, business finance comes into play. The funds are used
to earn profit and increase the value of the firm and the wealth of the owners.

A business constantly requires capital based on different perspectives:

 Short-term
 Medium-term
 Long-term

6
 MODULE 2
OUTPUT
BLENDED FLEXIBLE LEARNING
Business Finance (FINA 221)

Email or message the loan department of a financial institution that you are
assigned with and inquire about the details on getting a small business and personal
loan. Have a copy of all the requirements and supporting papers or forms needed for
the application. Include a screenshot of your inquiry to the bank.

Work on your assigned group and email me your output on or before March 4,
2021.

GROUP 1: BDO
GROUP 2: BPI
GROUP 3: SECURITY BANK
GROUP 4: METROBANK
GROUP 2: LENDING COMPANIES/COOPERATIVES

GROUP
NAME OF STUDENT
ASSIGNED
1 Alayon, Irish Mae S.  1
2 Aliday, Leziel A.  2
3 Barbas, Antonio L.  3
4 Baybado, Joan M.  4
5 Bedra, Lovelyn C.  5
6 Belgira, Jeciljoy T.  1
7 Bermejo, Carmela P.  2
8 Berona, Julie Ann R.  3
9 Blanca, Mark Stephene D.  4
10 Botis, Mariel L.  5
11 Bunda, Susie R.  1
12 Catigan, Angel M.  2
13 Cayao, Tricy Ann E.  3
14 Chua, Jaycel May B.  4
15 Concha, Tefany Joy B.  5
16 Denihay, Xavier Lewis L.  1
17 Diaz, Amelito E., Jr.  2
18 Dichoso, Shane Joseph T.  3
20 Dungog, Adrian B.  4
21 Ebuen, Thea Karyl J.  5
22 Flores, Lemwil N.  1
24 Gido, Rhea A.  2
25 Gomez, Rogelyn P.  3

7
26 Hermino, April L.  4
28 Jalando-on, Jessa Mae L.  5
29 Jinson, Daniela S.  1
30 Juno, Shana Mae R.  2
31 Junsay, Kezeah Mae A.  3
33 Loraez, Joy May C.  4
34 Magbanua, Ma. Rose Ann  5
35 Mandar, Lovely Mae L.  1
37 Moreno, Andrea N.  2
38 Olaes, Joaquin Philip L.  3
39 Palomo, Adrian J.  4
41 Ponteras, Mari June B.  5
42 Pradilla, Rina Mae A.  1
43 Prieto, Aljen A.  2
44 Prudente, Shiela Mae M.  3
46 Taboada, Kim D.  4
47 Tisa, Charleen V.  5
48 Villaflor, Esther Rose B.  1
50 Villalobos, Razel Joy A.  2