ORIGIN OF THE WORD: MONEY FROM THE FOREGOING DEFINITIONS OF MONEY,

IT CAN BE NOTED THAT MONEY IS:

- From the Latin word moneta, surname of
the Roman goddess Juno. 1. Medium of exchange
- Relative to the attribute of Juno Moneta as 2. Legal tender
3. Measure of value
the guardian of the finances of the Roman
4. Means of payment
Empire, it could also have been from the 5. Standard of value
Latin monere, meaning advise or warn. In
ancient Greece, the word moneta meant
advisor, one who warns or makes people
remember.
- Moneta refers to a mint or a place for
coining money.
- According to the etymonline.com, it also
comes from the Old French monoie and the
modern French monnaie, meaning money,
coin, currency or change.
- The first Roman mint was constructed
adjacent to the temple of Juno in BCE 289,
originally producing bronze and later silver
coins. Many of the coins bore an image of
the head of Juno Moneta on its face.
- Another term for money is “bucks”, which
came from the word “buckskins”, meaning
dear hides, a medium of exchange used by
settlers during the early times.

Money - is any item or verifiable record that is

generally accepted as payment for goods and
services and repayment of debts in a particular
country or socio-economic context.

*Miranda (2004) – defined money as anything

which is used as a medium of exchange and which
is widely acceptable for the payment of goods and
services without reference to the general standing
of the person who offers it.

MAIN FUNCTIONS OF MONEY:

a. A medium of exchange
b. A unit of account
c. A store of value
d. A standard of deferred payment
e. Conveyance
BARTER - is an old method of exchange;
to exchange goods for other things rather than
for money.
- does not involve money
- examples are online auctions or swap
markets
HISTORY OF BARTERING
6000 BC – introduced by Mesopotamia tribes
- and was then adopted by Phoenecians.
- Babylonians also developed an improved
bartering system. Goods were exchanged
for food, tea, weapons, and spices.
1930’s – due to lack of money, bartering was
popular during the GREAT DEPRESSION; it was
used to obtain food and other services.
BENEFITS OF BARTER
1. Bartering allows individuals to trade items
that they already have but are not using for
items that they need while keeping their
cash on hand for expenses that cannot be
paid through bartering such as a mortgage,
medical bills and utilities.
2. On a broader level, bartering can result in
optimal allocation of resources by
exchanging goods in quantities that
represent similar values.
HOW INDIVIDUALS BARTER?
1. When two people each have items the
other wants, both people can determine the
values of the items and provide the amount
that results in an optimal allocation of
resources
2. If an individual has 20 pounds of rice that he
values at $10, he can exchange it with
another individual who needs rice and who
has something that the individual wants
that’s valued at $10.
3. A person can also exchange an item for
something that the individual does not need
because there is a ready market to dispose
of that item.
HOW COMPANIES BARTER?
1. Companies may want to barter their
products for other products because they
do not have the credit or cash to buy those
goods.
2. It is an efficient way to trade because
the risks of foreign exchange are eliminated.
3. The most common contemporary example
of business-to-business barter transactions
is an exchange of advertising time or space;
it is typical for smaller firms to trade the
rights to advertise on each other’s business
spaces.
HOW COUNTRIES BARTER?
1. Goods are exported in exchange for
goods that the country needs. In this
 way, countries manage trade
deficits and reduce the amount of debt
they incur.

ADVANTAGES OF BARTERING

A. You do not need money to barter.

B. There is flexibility in bartering

C. You do not have to part with

material items. Instead, you can
offer a service in exchange for an
item.

DISADVANTAGES OF BARTERING

1. A complication of bartering is
determining how trustworthy the
person you are trading with is. The
other person does not have any proof or
certification that they are legitimate,
and there is no consumer protection or
warranties involved.

2. This means that services and goods you

are exchanging may be exchanged for
poor or defective items. You would not
want to exchange a toy that is almost
brand new and in perfect working
condition for a toy that is worn and does
not work at all.
 THE ORIGINS OF COINAGE
LYDIA/LYDIANS – are first to use gold and silver
coinage according to Greek historian Herodotus, in
the 5th century BC.
Early electrum coins have a strict weight system;
even with irregular shapes and sizes.
The spread of electrum coinage
– From Lydia electrum coinage soon spread to
the Greek cities of coastal Asia Minor
– One type of coin has the design of a seal on
its obverse. The Greek for seal is 'phoce' and
the coins are usually attributed to the Greek
city of Phocaea.
Names of Electrum Coins:
1. Walwel
2. Kalil
THE EARLIEST COIN HOARD
- during the British Museum excavations of
the Temple of Artemis at Ephesus in 1904-
1905. The hoard consisted of 19 coins which
had been placed in a small pot and buried
alongside another 74 coins in the
foundations of the temple, one of the seven
wonders of the ancient world, in about 600
BC.
COINAGE – money made of coins
- conversion of metals into coins
- system or type of money used in a country
MINT – place where metals are made into coins
May refer to:
a. coins, standardized as currency
b. neologism, coinage of a new word
c. COINage, numismatics magazine
d. Tin coinage, a tax on refined tin
e. Protologism, coinage of a seldom used new
term
BASIC PURPOSES OF MINTING COINS AND
PRINTING BILLS OF THE GOVERNEMENT:
1. Prevent confusion
2. Ensure uniformity and fineness (ratio of
weight of pure metal to total weight,
expressed in decimal or carat) of coins
3. Facilitate exchange
4. Ensure confidence on the part of the
citizenry with respect to the government’s
monetary system
KINDS OF COINAGE
1. Free Coinage or Gratuitous Coinage
- System whereby metals may be brought to
the government mint and converted into
standard money without any charge for
minting except for the delay involved in the
process.
2. Brassage
- Kind of coinage where the fee charged by
the government to mint metals into coinis
just sufficient to cover the cost of minting.
The government does not earn anything.
3. Seigniorage/ Seignorage
- Kind of coinage where the fee charged by
the government is more than the cost of
minting so the government earns a profit.
4. Limited Coinage
- Wherein the government coverts metals
into coins only at its option. There is no
privilege of free coinage in such a case.
 A. PAPER MONEY
- Started by the Chinese
A. Tang Dynasty (618 – 906 AD)
- Invented printing and the use of money
B. Song Dynasty (960 – 1279 AD)
- Used paper money alongside coins
C. Yuan Dysnasty (1271 – 1368 AD)
- 1st Dynasty to circulate currency as the
medium of exchange.
- Formally established by Kublai Khan
D. Ming Dynasty (1368 – 1644 AD)
- Chinese placed the emperor’s seal and the
signature of the treasurer on a crude paper
made from the mulberry bark.
11th CENTURY – Mongolia became the 2nd country
to use paper money.
12th CENTURY
- Moors established the first paper mill in
Europe (Spain)
- Paper was less preferred by Christians who
favored the use of parchment/vellum.
17th CENTURY
- Bank of Sweden issued the first paper
money in Europe.
- Bank of England was founded, which began
issuing promissory notes, originally
handwritten but later printed.
*The used of gold became risky so the goldsmiths started
writing out notes on pieces of paper, which stated that
whoever has the note can trade it for gold.
*A British bank note would contain a statement saying, “I
promise to pay the bearer on demand the sum of ____”
*The use of paper money alleviated the problem of
scarcity of the precious metal used in the minting of
coins. Moreover paper money is lighter than coins,
making it more comfortable
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 – REPRESENTATIVE PAPER MONEY –
FOLLOWING THE LONG USE OF COMMODITY – FLAT
MONEY
B. PLASTIC (POLYMER) MONEY
A. Plastic Money – actual cash made of super
resistant polymer film
B. Polymer Money – feels like regular paper
bill, but lasts longer
Australia was the first country to develop and
use polymer notes in general circulation in 1988
after the significant research and development
done by the Commonwealth Scientific and
Industrial Research Organization (CSIRO) and
the Reserve Bank of Australia.
In 1996, Australia became the first country to
have a full set of circulating polymer banknotes
of all denominations.
*As of November 18, 2011, 23 countries use 18. Western Samoa
polymer banknotes (BBC News) 19. Zambia

Countries that had all their denominations Other countries issued commemorative
converted into plastic: polymer notes:

1. Australia 1. China
2. Bermuda 2. Kuwait
3. Brunei 3. Northern Bank of Northern Island
4. New Zealand 4. Singapore
5. Vietnam 5. Taiwan
6. Romania
*Bulgaria issued the first hybrid paper polymer
7. Papua New Guinea
banknote in 2005
Other countries with notes printed on guardian
*Costa Rica and Haiti issued the first tywek in 1983
polymer in circulation:

1. Bangladesh
2. Brazil ADVANTAGES OF PLASTIC (POLYMER) MONEY:
3. Brunei
1. More durable, harder to counterfeit and
4. Chile
environment-friendly
5. Hong Kong
2. Less Polluting
6. Indonesia
3. Production process is more energy efficient
7. Israel
4. Recyclable at the end of its useful life
8. Malaysia
5. It’s durability makes it cost-effective in the
9. Mexico
long run
10. Nepal
6. Polymer notes last up to 4x longer than
11. New Zealand
paper notes
12. Papua New Guinea
13. Romania
14. Singapore
15. Sri Lanka
16. Thailand
17. Vietnam
DISADVANTAGES OF PLASTIC (POLYMER) MONEY:
1. When polymer notes come in contact with
water on some other liquids, they tend to
stick together
2. They are not suitable for folding. When
folded, a permanent crease is created
3. Bulkiness of creased polymer notes, and
the print durability are other disadvantages
C. PLASTIC MONEY
- Hard plastic cards used in everyday
exchange transactions in place of actual
bank notes
- These cards are more portable than money
and less risky than carrying large sums of
money.
- Easier to use because one’s transaction is
not paid immediately. Instead, they allow
one to “lengthen” or “stretch” his budget.
CLASSIFICATIONS OF PLASTIC MONEY:
1. Credit Card
- Allows owners to buy products on credit
from different stores and establishments
- Has a credit limit (the maximum amount
that can be charged to the credit card)
- Holders are not allowed to charge anything
beyond their limit.
2. Debit Card
- The bank where the account is maintained
issues the debit card.
- Immediately charged to the cardholder’s
bank account
3. Cash Card
- Only allows withdrawal of money through
an Authorized Teller Machine. In short, it is
used for ATM transactions only. A cash card
can be used as a debit card as well.
4. Gift Certificate
- a prepaid cash card that can be given as gift
so that the recipients can choose what they
want as a gift. This card can be a specific
prepaid cash card issued by the store where
it can be used for purchase.
5. Store Card
- Is like a credit card, generally issued by a
particular store ad can be used for purchase
in the same store.
- This is a simple credit granted by stores to
encourage customers to spend more in
their store.
6. Multi-Currency Prepaid Card
- The Philippine Star, September 30, 2013
edition, reported that East West Bank
launched Southeast Asia’s first multi-
currency prepaid card. It ca load up to six
different currencies ----- US Dollar, Euro,
British pound, Hong Kong Dollar,
Australian Dollar, and Japanese yen.
- It can be used for purchases at (point of
sale) POS terminals.
BARTER EXCHANGE
- A network of business owners who want to
trade products and services to increase
sales and, consequently, profit together
with a reduction of cash outlay, thus freeing
business cash for other purposes to run the
business.
Bartercard
- is a barter-trading system where you
can barter your goods and services within
the Bartercard cashless business network.
Advantage of Trading through the Barter
Exchange
1. Turn unproductive assets into a medium of
exchange.
2. Better cash flow and, therefore, better cash
position for the company.
3. Increase sales and create new markets.
4. Greater profitability with increased sales.
5. Enable faster turnover of inventories
6. Slow-moving inventories are sold at regular
instead at reduced prices.
7. Otherwise idle time is made productive.
8. Provide computerized bookkeeping by
providing online account balances, histories
and monthly statements.
9. Billing hassle is dispensed with or
eliminated.
10. Can provide employee bonuses and
benefits without the use of cash.
11. Increase a company’s or a person’s credit
line through the credit line granted by the
exchange to exchange members.
FUNCTIONS OF MONEY
1. Medium of exchange - can be used for
exchange of goods and services.
2. Standard of value - measure the value or
worth of something.
3. Store of value - the value needed in the
future is stored.
4. Means of deferred payment - money is
acceptable in payment of debts or liabilities.
5. Conveyance - money conveys or transfers
title or possession.
FORMS/ TYPES OF MONEY
1. Commodity Money – when things are used
to get what we want, be it goods or
services, the things we used to pay for such
may be termed commodity money.
2. Currency (bills and coins) - legal tender in a
country.
3. Check – generally used by businesses and
persons in conducting business, as well as
personal transactions.
4. Personal Check
5. Business Check
6. Cashier’s Check
7. Certified Check
8. Traveler’s Check

PARTIES TO A CHECK

1. MAKER – is the drawer or writer of the

check.
- Payer/debtor, the one who owes someone or
some company.
- Depositor with a current account with the
bank where the funds will come from.

2. DRAWEE – is the bank which is ordered to

pay the payee. It is the bank where the
current account is maintained.

3. PAYEE – the one to whom the check is to

be paid.

- He is the creditor; he endorses or signs the

back of the check.

PARTIES TO A TRAVELER’S CHECK

1. ISSUER OR OBLIGOR – company issuing

or producing the traveler’s check.
2. AGENT – financial institution who sells the
traveler’s check.
3. PURCHASER – the person buying the
traveler’s check and will use it as a form of
money.
4. PAYEE – the seller of goods or services to
be paid with the traveler’s check.
BANK DRAFT
- A bank draft is a payment on behalf of a
payer that is guaranteed by the issuing
bank.
5 Types of Bank Draft
1. Demand Draft - a demand draft is a method
used by an individual for making a transfer
payment from one bank account to
another.
2. Time Draft - this draft is payable sometimes
in the future like post- dated check.
3. Local Draft - this draft is issued by a bank in
a single country. It is not accepted in any
other places but that country. It applies to
local transaction.
4. International Draft - this draft is used
globally or internationally. Companies
which deal with companies in foreign
countries use this draft.
5. Automatic Bank Draft (ABD) - this draft
takes out money from the payer’s account
electronically at regular intervals.
• MONEY ORDER - 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.
Warehouse Receipt (WR) – a warehouse
receipt is a document that provides proof of
ownership of commodities that are stored in a
warehouse, vault, or depository for
safekeeping.
OTHER CLASSIFICATIONS OF MONEY
1. Fiat/ Fiduciary Money
- Money issued by the government
without any gold/ metals or dollar
backup
- and in which face value is higher that
the material of which is it made of;
- also called fiat because money is
given value by a government edict or
decree as medium of exchange, which
is legal tender.
2. Representative Money
- Representative money is issued by the
government’s or bank’s promise to
exchange it for a certain amount of
silver and gold.
- According to Merriam- Webster
Dictionary, it is a piece of paper
backed by an equal amount of gold or
silver coin.
 Characteristics of Good Medium of
Exchange

1. Scarcity – rare or hard to find

2. Divisibility – refers to the quality of being
broken down into smaller units
3. Portability – as ease in handling or carrying
4. Durability – quality of lasting long