Eniglish for finance and accounting

UNIT FOUR MONEY

• 
  self-supplied
  
• 
  commodity exchange
  
• 
  standard unit
  
• 
  commodity money
  
• 
  flat money
  
• 
  non-physical money
  
• 
  single money
  
• 
  basket money
  
• 
  PPP
  
• 
  SDR
  

In the primitive society, the period during which production was poor and self-supplied, barter was made incidentally, was called commodity exchange times, e.g. rice exchanged for salt, fabric for cow… But when production and labor division were improved and the exchange is more expanded between localities, a certain commodity was agreed to be used as money.

Gold and silver are precious metal. They gradually replaced other commodity money in every country… Gold and silver coins forced commodity production to improve, planted the seed for banking birth and its development. However, due to increasing trade with the mass of products it was convenient to bring a large quantity of coins. Thus, banknotes came into being, replaced metal money…Today with the boom of informatics (and) communication, payment by cash gives way to payment through banks by using substitute money.

Money in a country

Money is any means that is acceptable by custom and laws as a standard unit for accounting value of assets, a medium of exchange and a security of wealth for future use. The volume of all form of money circulating in a country is called the money supply.

As a measure of value, the monetary standard used to be link to some items of value (commodity money, ex: gold) or fixed by government (Flat money). Nowadays, the value of money (or the money purchasing power) fluctuates in connection with every day changes in the costs of living (flexible money).

As a medium of exchange, money exists in a form of physical or real money, called cash currency which is legal tender, and non-physical or money substitute which are certificates of debts. Non-physical money consists of cashable instruments (or instrument of payment) and cashless money (quasi money, or instruments of credit, which is payable only at a certain date in the future).

As a security of value, money is the sort of cashless that can store the real value of assets represented by the paper, provided that the holders arrange to keep his money in security. Securities are given to holders under forms of certificates such as Certificate of Deposit (or Bond, representing money owed by a borrower), Stock share certificate (or Stock, representing a stake in the share capital of a company).

Money in the world

In international trade and finance, transactions are dominated in trade money. As global transactions involve a myriad of currencies, it is essential to set up an exchange rate for each country.

An exchange rate tells us the value of currency in terms of another currency. This is made possible by comparing the monetary standards of the two currencies. As a currency value is based on a floating standard that changes everyday, the PPP process is useful to measure the purchasing power of currencies and to fix their rate. The process of Purchasing Power Parity is a way of comparing how many goods and services each country can get at a certain time. This comparison may be made on a single currency or on the basket currency base. The single standard is common in free trade and the basket standard is used in mostly in official transactions.

Circulating on free trade markets, a currency may be weak or strong. Weak (or unconvertible, or “soft”) means that the currency can be used only within its home country, not tradable in the world. Strong (or convertible, or “hard”) means that the currency has strong international liquidity and is used as trade money.

Official international money is a system of monetary units that is used for bookkeeping and accounting only. Actual settlements are made in other currencies. The most powerful world is the SDR issued by the IMF.

Discussion

1. 
   Name a payment mechanism used in the primitive society. What was it later replaced by?
   
2. 
   What are advantages and disadvantages of commodity money?
   
3. 
   What are main functions of money?
   
4. 
   What are cheques?
   
5. 
   What are bills?
   
6. 
   What is the exchange rate?
   
7. 
   What is the PPP used for?
   
8. 
   What is the purchasing power?
   
9. 
   Briefly describe circulating a currency on free market trade.
   

Read the text below and find the right word or phrase from the box to fill each of the gaps.

bills chamber freight insurance lading payment

certificate expiry full invoice origin ship

Your customer has opened an irrevocable credit on his account and in your favor. You can now go ahead and (1)……….. the goods. You must not delay too long; the credit is only valid until its (2)………... date. As soon as the goods are on board ship, the bill o f(3)……….. is signed and sent to your freight forwarder. You can now send it to your bank with the other documents which will enable (4)……… to be made. The first is the (5)……….., showing the total cost “C.I.F”-cost of goods, plus (6)………, plus (7)……... .This must be accompanied by the insurance (8)………., and often by a certificate of (9)………… , to show where the goods, and often by a certificate of originated. This often has to be authenticated by your local (10)……… of commerce. If the goods are going by sea, you must also enclose the (11)……… set of clean (12)……… of lading.

Translation

Translate the following text into English paying special attention to standard use of terms and clarify of expression.

Công cụ chi trả của du khách

Tiền do lữ khách nước ngoài mang vào để chi cho hàng mua lẻ và đóng dịch vụ phí phần nhiều là tiền mặt, séc du lịch hay thẻ tín dụng.Các tiện nghi ngân hàng như chi phiếu và thẻ nhựa ngày càng được chấp nhận trên toàn thế giới như một phương tiện thuận lợi và an toàn để chi trả trong mua bán lẻ.

Séc du lịch được phát hành bằng nhiều loại tiền mậu dịch và có nhiều mệnh giá.Bạn có thể đến ngân hàng mua chúng khi bạn đi du hành.Bạn sẽ ký vào séc khi bạn nhận chúng và khi bạn thanh toán bạn sẽ lại ký vào từng tờ séc một lần nữa.Các séc này được dùng chung với hộ chiếu của bạn và nếu như chúng bị mất hay bị đánh cắp thì chính ngân hàng phát hành chúng sẽ hoàn tiền lại cho bạn.

Tiền nhựa, thường hiểu là thẻ tín dụng, quả thực là loại thẻ thông minh.Chúng tạo cho người cầm thẻ rất nhiều tiện lợi và ngày nay nhiều thẻ đã được công nhận như công cụ chi trả quốc tế.Trong số các thẻ tín dụng quốc tế đó, một số loại đã được các ngân hàng Việtnam chấp nhận.Đó là các loại:Visa card, Master card, JBC, và Amex(chữ tắt của American Express card).