Principles of Finance/Section 1/Chapter 1/The Basics/Money

Money is the underlying concept of finance which is an abstract unit form of a resource. Finance studies and addresses the ways in which individuals and organizations raise, allocate, and use monetary resources over time while taking into account risk. Since we are dealing with modern times, these monetary resources refer to money as we know it. Before getting into the principles of finance one must have an understanding of money and its origins.

What is Money?

Money is anything that is generally accepted as payment for goods and services and repayment of debts. Money thus enables payments to be made for purchases and savings. It can come in various forms, such as coins, bills, checks and credit cards.

Functions of Money

Money has many important functions. The first would be to place a value on any product or service.