Functions of Finance

1. Allocation of Resources Financial Resources

2. Procurement of Funds needs money for expansion
3. Efficient & Effective Utilization of Financial Resources
Efficient maximize output with limited resources
Effective perform function as required and expected

4 Functions of Management
1. Planning
2. Organizing
3. Leading/Directing
4. Controlling
Failing to Plan is Planning to Fail

FINANCIAL STATEMENT
1. Balance Sheet standing of business in a day
Assets = Liabilities + Capital
2. Income Statement result of the operation of the business
Sales or Revenue Expenses = Profit or Loss

Fiscal v. Calendar Year
Fiscal Year operating calendar of the business
Calendar Year starts January and ends December
~ They have the same time, it just differs on the time it starts and ends.


Forms of Business Organizations
1. Sole Proprietorship
2. Partnership association of 2 or more persons who bind themselves together
3. Corporation 5 minimum
To be a majority stock holder you must have at least 20% stocks of the corporation








PHILIPPINE MONETARY SYSTEM
Medium of exchange
Trading of goods & services

Universal Currency US Dollar
Money represented by coins & bills

CHARACTERISTICS OF MONEY
1. Portability
2. Acceptability
3. Durability
4. Divisibility
5. Stability of Value
6. Scarcity
7. Cognizability
8. Uniformity
9. Malleability
10. Non Counterfeitability

CASH
Cash on Hand in your possession
Cash in Bank - kept in a Financial Institution
Check / Cheque

Types of Bank Accounts
1. Savings Account
- Earns interest
- Deposit by pass book (ATM) serve as evidence
- Withdrawal thru ATM or Withdrawal Slip (over the counter)
2. Checking Account
- Doesnt earn interest (non-interest bearing account)
- Deposit evidence by issuance of check or over the counter
- Bouncing check / Estafa
a. Personal
b. Business
3. NOW Account (Negotiable Order of Withdrawal)
Hybrid of savings and checking account
- Interest earning account and also given a checkbook for your account
- Lower interest than Savings account suppose to earn

Types of Checks / Cheque
1. Local clearing check
- cannot be cashed in 3 days
2. Regional clearing check
- Cannot be cashed in 7 days
3. Out of Town check
- When BSP has no jurisdiction, can be cashed in 40 days

Reasons for Bouncing Check
1. DAIF (Debit Against Insufficient Fund)
*Remedy: on the 2
nd
day, the bank will call you for you to put enough money on your account
2. DAUD (Debit Against Uncleared Deposit)
*Remedy: just redeposit it
3. Account Closed
4. Stale Cheque - good for 6 months
- If not in encashed in 6 months
*Remedy: go to the one who issued the check to revalidate the check
5. Post dated check
- May time or date na nakalagay sa check para ma encash
6. Error in amount & words
7. Signature differs





GDP / Gross Domestic Product (Gawa Dito sa Pilipinas)
- value of goods & services produced within a country

GNP / Gross National Product (Gawa Ng Pilipino)
- value of goods & services produced by the citizens of a country, within & outside the
country
not accurate because small-scale industries is not reported or recorded


GLOBAL FINANCIAL CRISIS (2006)
- most intense crisis after the Great Depression
- happened in the USA (house bubble / sub-prime mortgages)
started when the US offered sub-prime lending
gave loans to people incapable of paying such
(no everyday sources of income)

Institutions
- bank it up
interest lending mortgages
other financial support
- those who backed such sub-prime lending walang makuhang pera
~ mga tao walang pambayad

Philippines was not affected by the Global Financial Crisis kasi nagbagsak ng e-vat si GMA