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Questions and Answers
Municipal Bonds are long-term instruments issued by ______ to finance projects.
Municipal Bonds are long-term instruments issued by ______ to finance projects.
municipalities
Lease-to-buy are leases where the lessee has the option to buy the property being leased after a given ______.
Lease-to-buy are leases where the lessee has the option to buy the property being leased after a given ______.
period
Mortgage-backed Bonds are bonds that are secured or collateralized by a ______.
Mortgage-backed Bonds are bonds that are secured or collateralized by a ______.
mortgage
Indexed or purchasing power bonds have interest rates paid based on an ______ index.
Indexed or purchasing power bonds have interest rates paid based on an ______ index.
Cash dividends represent a certain amount per ______.
Cash dividends represent a certain amount per ______.
Stock dividends provide a certain number of ______ per a specified number of shares held.
Stock dividends provide a certain number of ______ per a specified number of shares held.
Liquidating dividends are primarily a return of ______; they are also used for extractive industries.
Liquidating dividends are primarily a return of ______; they are also used for extractive industries.
Secured bonds are collateralized by ______ or other assets.
Secured bonds are collateralized by ______ or other assets.
A Warehouse Receipt (WR) is evidence of goods stored in a ______.
A Warehouse Receipt (WR) is evidence of goods stored in a ______.
Trading through barter exchanges can improve operational ______ and add value to the firm.
Trading through barter exchanges can improve operational ______ and add value to the firm.
Personal checks are drawn against a person's own current/checking ______ with a bank.
Personal checks are drawn against a person's own current/checking ______ with a bank.
Cashier's checks are issued by a ______ and signed by its cashier or manager.
Cashier's checks are issued by a ______ and signed by its cashier or manager.
Certified checks ensure the availability of funds in the account of the ______ issuing the check.
Certified checks ensure the availability of funds in the account of the ______ issuing the check.
Barter exchanges allow for the conversion of unproductive assets into a medium of ______.
Barter exchanges allow for the conversion of unproductive assets into a medium of ______.
Traveler's checks are a preprinted, fixed amount ______ sold by financial institutions.
Traveler's checks are a preprinted, fixed amount ______ sold by financial institutions.
One advantage of trading through barter exchanges is a faster turnover of ______.
One advantage of trading through barter exchanges is a faster turnover of ______.
One of the disadvantages of barter economy is the lack of a way to measure the value of goods and ______.
One of the disadvantages of barter economy is the lack of a way to measure the value of goods and ______.
After the barter system, various forms of money were introduced, including ______, cowrie shells, and metals.
After the barter system, various forms of money were introduced, including ______, cowrie shells, and metals.
E-banking and plastic money are examples of ______ money which is exchanged electronically.
E-banking and plastic money are examples of ______ money which is exchanged electronically.
In the context of currency, businesses typically use a medium of ______ as part of their trading practices.
In the context of currency, businesses typically use a medium of ______ as part of their trading practices.
The term ______ refers to a monetary system that relies on physical goods to represent value.
The term ______ refers to a monetary system that relies on physical goods to represent value.
Coins made from ______ and gold have been historically significant as forms of currency.
Coins made from ______ and gold have been historically significant as forms of currency.
One major reason for the innovation in financial systems is to address the ______ of traditional currencies.
One major reason for the innovation in financial systems is to address the ______ of traditional currencies.
Different types of plastic money, including credit and debit cards, have become common in modern ______.
Different types of plastic money, including credit and debit cards, have become common in modern ______.
The money that you borrow will be inflows to the company, what are the outflows from borrowing money from the ______?
The money that you borrow will be inflows to the company, what are the outflows from borrowing money from the ______?
When evaluating an investment decision, companies should assess the potential ______ of the investment.
When evaluating an investment decision, companies should assess the potential ______ of the investment.
Loan payable represents a borrowing which will have an inflow of money and an ______ at maturity.
Loan payable represents a borrowing which will have an inflow of money and an ______ at maturity.
Interest on borrowings may be paid on a ______, semi-annually, or quarterly depending on the agreements.
Interest on borrowings may be paid on a ______, semi-annually, or quarterly depending on the agreements.
Plastic money usually refers to ______ like credit and debit cards.
Plastic money usually refers to ______ like credit and debit cards.
E-money refers to money or script that is exchanged only ______.
E-money refers to money or script that is exchanged only ______.
Standard currency is also known as a single ______ adopted as a monetary standard.
Standard currency is also known as a single ______ adopted as a monetary standard.
When a company issues equity, it creates ______ certificates.
When a company issues equity, it creates ______ certificates.
The two types of debit cards are Current Account and ______.
The two types of debit cards are Current Account and ______.
Barter allows for the exchange of goods and services without the need for ______.
Barter allows for the exchange of goods and services without the need for ______.
BSP, the mother bank of all banks, is located in ______.
BSP, the mother bank of all banks, is located in ______.
Retained earnings are calculated after adding and deducting ______.
Retained earnings are calculated after adding and deducting ______.
The difficulty of storing value can lead to the ______ or degradation of money over time.
The difficulty of storing value can lead to the ______ or degradation of money over time.
Financial management includes various business organizations such as Service, Trading, and ______.
Financial management includes various business organizations such as Service, Trading, and ______.
Cash Card, Credit Card, and Prepaid Cash are all types of ______.
Cash Card, Credit Card, and Prepaid Cash are all types of ______.
Higher maintaining balances are required for ______ accounts compared to savings accounts.
Higher maintaining balances are required for ______ accounts compared to savings accounts.
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Study Notes
Municipal Bonds and Financing
- Long-term instruments issued by municipalities to fund infrastructure projects such as roads, bridges, and sewage plants.
- Lease-to-buy agreements allow lessees the option to purchase leased property after a specified time.
Types of Bonds
- Mortgage-backed Bonds: Secured by mortgages, effectively collateralized.
- Indexed Bonds: Interest rates linked to inflation indices, such as the Consumer Price Index.
Dividends
- Dividends from Earnings: Share of profits distributed to shareholders.
- Cash Dividends: Fixed amount paid per share.
- Stock Dividends: Additional shares given based on existing shareholdings.
- Property Dividends: Non-cash assets distributed as dividends.
- Liquidating Dividends: Return of capital, often used in extractive industries.
Stock Options
- Grants stockholders rights to purchase additional shares, maintaining ownership proportion.
Corporate Bonds
- Secured Bonds: Backed by collateral such as mortgages.
- Debenture Bonds: Unsecured, reliant on issuer's creditworthiness.
Warehouse Receipts
- Evidence of goods stored in a warehouse, usable as collateral for loans.
Types of Checks
- Personal Checks: Drawn against individual checking accounts.
- Business Checks: Issued by companies against their business accounts.
- Cashier's Checks: Issued by a bank, guaranteeing funds availability.
- Certified Checks: Personal checks verified by a bank for fund availability.
- Traveler's Checks: Preprinted checks usable like currency internationally.
Advantages of Barter Exchanges
- Convert unproductive assets into exchange mediums.
- Improve cash flow, increase sales, and enhance profitability.
- Enable faster inventory turnover and utilize idle assets productively.
- Provide online bookkeeping and simplify employee benefits without cash.
Functions of Money
- Serves as a medium of exchange, facilitating transactions in modern economies.
- Historical forms of money included cattle, cowrie shells, and metals like silver and gold.
Electronic Money
- Electronic payments via plastic money and online banking.
- E-cards encompass debit, credit, and prepaid cash cards.
Barter Economy Disadvantages
- Difficulty measuring value of goods and services results in unfair trade.
- Barter transactions can be time-consuming compared to cash transactions.
Business Organizations by Purpose
- Categories include service, trading/merchandising, manufacturing, banking and finance, mining/extractive industry, construction, and genetic industry.
Financial Transactions
- Understanding inflows and outflows in relation to account receivables and payables.
- Borrowing from banks leads to inflows but requires outflows for interest payments.
Standard Currency
- Single standard currency metal serves as a benchmark for transactions.
- The Bank of the Philippines (BSP) is the central bank managing the nation's monetary policy.
Key Financial Concepts
- Retained earnings calculated by adjusting dividends for a company's profit at year-end.
- Effective business decisions require assessing long-term returns on investments, such as purchasing machinery.
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