Unit 9 Finances

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I n d e xI n d e x

f i n a n c e sf i n a n c e s


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Kinal, Technical Center

Vocabulary for this thematic unitVocabulary for this thematic unit. . . .. . . . . . . . . . 033

What about Finances?What about Finances? . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . . . 044

What is money?What is money? . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . 055

Counting moneyCounting money

. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 66

How many types of money do you know?How many types of money do you know?

. . .. . . 1010

Using the BankUsing the Bank. . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . 1212

What is a tax?What is a tax? . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 1515

What is a bill?What is a bill?

. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . 1616

What is a Budget?What is a Budget? . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . .. . . 1717

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The experience of CommunicatingThe experience of Communicating . . . . . . . . . . .. . . . . . . . . . . 1818

Information sourcesInformation sources . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . .. . . 2020

VOCABULARY FOR THIS THEMATIC UNITVOCABULARY FOR THIS THEMATIC UNIT

WordsWords

alike igual, parecido

ATM (automatic teller machine) (cajero

automtico

average media, promedio

bill factura, proyecto de ley, billete

budget presupuesto

cash dinero, efectivo

channel cause, canal, banda

charge cargar, cobrar.

cheap barato

each cada

earpiece auricular

endorse endosar, aprobar

expensive caro, costoso

governance gobierno

government gobierno

however sin embargo, no obstante

income ingresos

insurance seguro

measurement medicin, medida

notice darse cuenta

outflows flujo, salidas

payment, pago

penalties castigo, penalizacin

random al azar, aleatorio

rate ndice, tarifa,

revenue ingresos (de empresa)

savings ahorros

solve resolver

source fuente

taxes impuestos

unforeseen imprevistowave onda, ondear

withdraw retirar

withdrawal retiro de dinero

ExpressionsExpressions

a great deal Una gran cantidad

credit card tarjeta de crdito

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itself a si mismo, si mismo

lend prestar (algo a alguien)

length (medida) largo, extension,

duracin

level nivel

link enlace, conexinloan prstamo

location ubicacin, localizacin

match partido, hacer pareja

debit card tarjeta de dbito

deposit slip boleta de depsito

go shopping ir de compras

money order giro (de pago)

pay by mail pagar por correo

electrnico

WHAT ABOUT FINANCES?WHAT ABOUT FINANCES?

Finances is the science of fund management. The general areas of finances are

business financesbusiness finances,personal financespersonal finances, andpublic financespublic finances. Finances include saving money

and often include lending money. The field of finances deals with the concepts of time, money

and risk and how they are interrelated. It also deals with how money is spent and budgeted.

Basically, finances work through individuals and business organizations that deposit money

in a bank. Banks then lend that money out to other individuals or corporations for

consumption or investment, and charge interest on the loans. Central banks act as lenders of

last resort and control the money supply which affects the interest rates charged. As money

supply increases, interest rates decrease.

Personal financesPersonal finances

Questions in personal finance revolve around

* How much money will be needed by an individual (or by a family), and when?

* Where will this money come from, and how?

* How can people protect themselves against unforeseen personal events, as well as those

in the external economy?

* How can family assets best be transferred across generations (bequests and inheritance)?

* How does tax policy (tax subsidies or penalties) affect personal financial decisions?

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* How does credit affect an individual's financial standing?

* How can one plan for a secure financial future in an environment of economic instability?

Personal financial decisions may involve paying for education, financing durable goods

such as real estate and cars, buying insurance, health and property insurance, investing and

saving for retirement. Personal financial decisions may also involve paying for a loan or debt

obligations.

CapitalCapital

Capital, in the financial sense, is the money that gives the business the power to buy

goods to be used in the production of other goods or the offering of a service.

What is money? What is money?

An easy definition for money could be: anything generally accepted as payment for goods

and services and other financial operations (like loans). The main functions of money are

distinguished as:

Medium of exchange:Medium of exchange: When money is used to get goods and services, it is performing

a function as a medium of exchange.

Unit of account:Unit of account: Its a standard numerical unit of measurement of the market value of

goods, services, and other transactions. Also known as a "measure" or "standard" of

relative worth, a unit of account is a necessary prerequisite for the formulation of

commercial agreements that involve debt. To function as a 'unit of account', money

must be:

Divisible into smaller units without loss of value; precious metals can be

coined from bars, or melted down into bars again.

Fungible: that is, one unit or piece must be perceived as equivalent to any

other, which is why diamonds, works of art or real estate are not suitable

as money.

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A specific weight, or measure, or size to be verifiably countable.

Storage of value:Storage of value: To act as a store of value, a commodity, a form of money, or

financial capital must be able to be reliably saved, stored, and retrieved and be

predictably useful when it is so retrieved.

Counting money Counting money

In order to count money and facilitate the commercial transactions, a monetary unit has

been established whose name is different in every country, even though it accomplishes the

same functions. Such monetary unit has multiples and sub multiples, for example:

Monetary unit: Dollar

Sub multiples:

Penny:Penny: its a one cent coin.

Nickel:Nickel: its a five cent coin.

Dime:Dime: its a ten cent coin.

Quarter:Quarter: its a twenty-five cent coin.

Half dollar:Half dollar: its a fifty cent coin.

Multiples:

Two dollar bill

Five dollar bill.

Ten dollar bill.

Twenty dollar bill.

Fifty dollar bill.

One hundred dollar bill and more denominations.

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Please dont forget the definition forPlease dont forget the definition for

money:money:anything generallyanything generallyaccepted as means ofaccepted as means of

payment.payment. The functions are:The functions are:Medium of exchangeMedium of exchange,, unit ofunit of

accountaccount andand storage of valuestorage of value


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Exercises Exercises

Complete the chart. Write the amount.Complete the chart. Write the amount.

1.

$ 1.76

2.

$ 10.57

3.$ 6.11

4.

$ 25.35

5.

$ 527.00

6.

$ 22. 55

7.

$ 1023.00

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8.

$ 2020.01

Circle the word or phrase that doesnt matchCircle the word or phrase that doesnt match

1. A money order cheap a credit card cash

2. A check expensive cheap average

3. A bill a check a money order cash

4. A check a money order an ATM a credit card

5. Charge go shopping pay cash pay by mail

6. Expensive credit card electronic money cash

7. A bank a mall a market an ATM

8. Charge payment a bill a bank

9. A travelers check plastic money money order charge

Complete the conversations by choosing the correct answer.Complete the conversations by choosing the correct answer.

1. A: This cold medicine is not cheap!

B: How much is it?A:a.a. Great! b.b. Its $13.99 c.c. I will take it.

2. A: Ill take it

B: Great. Will you pay Cash or charge?

A:a.a. No. b.b. Here you are. c.c. cash.

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CC


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3. A: What are you going to do on Saturday?

B: Im going to go shopping. How about you?

A: a.a. me too. I want to pay my bills. b.b. Not me. I have a credit card.

4. A: How much is that jacket?B: The red one? Its $129.00 on sale.

A: a.a. let me check my agenda. b.b. Its OK. May I pay by check?

Draw or paste the bills and/or coins to illustrate the correct amount ofDraw or paste the bills and/or coins to illustrate the correct amount of

money.money.

$ 85.36$ 85.36 $ 327.55$ 327.55 $ 2.75$ 2.75

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DD

11 22 33

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$ 14.25$ 14.25 $ 7.61$ 7.61 $ 1,357.07$ 1,357.07

How many types of money do you know? How many types of money do you know?

Currently, money has the same functions all around the world (medium of exchange, unitof account and storage of value). However, people use it in different types according to their

necessity or convenience. Sometimes people use cash, other times they use checks or credit

cards, Etc. When people travel to different countries, most of them use travelers checks or

plastic money. Even when you make a purchase on the internet, you use electronic money.

Cash money:Cash money:physical money that you have into your wallet, your purse, Etc. It has

different denominations and it can be used immediately. It is generally used in purchases that

require a little amount of money.

Bills

Coins

Credit documents:Credit documents: they are documents that represent money, but they are not

accepted in all places. You can generally transform them into cash by charging them in a

banking institution.

Checks

Travelers checks

Money orders

Plastic money:Plastic money: now-a-days, plastic money is accepted in most places like malls,

restaurants, hotels, trades, flights, deals, etc. Sometimes, there are additional

requirementsbefore getting plastic money, especially when it is about a credit card.

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66

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Credit cards

Debit cards

Electronic money:Electronic money: generally, people use this type of money to operate banking

transactions betweendifferent countries, between different banks, for international deals, etc.

orforpurchases on the internet.

Wire transfers

In the next chart you will appreciate the different types of money:

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USING THE BANKUSING THE BANK

what is a bank? what is a bank?

A commercial bank is a type of financial intermediary and a type of bank. Commercial

banking is also known as business banking. A bank provides checking accounts, savings

accounts, and money market accounts and accepts time deposits.

Commercial banking can also refer to a bank or a division of a bank that mostly deals with

deposits and loans from corporations or large businesses, as opposed to normal individual

members of the public.

Commercial banks generally perform the following activities:

*Processing of payments by way of telegraphic transfer, EFTPOS, internet banking, or

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A bank is a good place toA bank is a good place to

keep your money. Yourkeep your money. Your

money is safe and it earnsmoney is safe and it earnsinterest.interest.

ConversationConversation

A:A: Id like to deposit this check.

B:B: Fine. Please endorse thecheck.

A:A: Do I sign here?

B:B: Thats correct. Heres your

receipt.

A:A: Thanks.


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other means.

* Issue bank drafts and bank checks.

* Accepting money on term deposit.

* lending money by overdraft, installment loan, or other means.

* Providing documentary and standby letter of credit, guarantees, performance bonds,

securities underwriting commitments and other forms of off balance sheet exposures

*safe keep of documents and other items in safe deposit boxes.

Exercise Exercise

There is important information that you must not miss when youre filling out a deposit

slip. What is this important information?

1.

2.

3.

4.

5.

There is also important information that you must not miss when youre filling out a check.

What is this important information?

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In the US, you can either sIn the US, you can either s

money to your account omoney to your account omake a withdrawal from ymake a withdrawal from yaccount. In Guatemala, thaccount. In Guatemala, th

is a specific slip to makeis a specific slip to makedeposits and withdrawaldeposits and withdrawals

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1.

2.

3.

4.

5.

WHAT IS A TAX?WHAT IS A TAX?

To taxtax (from the Latin taxaretaxare: to estimate,) is to impose a financial charge or other levy

upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a

state.

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In Guatemala many employersIn Guatemala many employersuse to pay by check. Other onesuse to pay by check. Other ones

do it by depositing on a bank.do it by depositing on a bank.

If you receive your salary byIf you receive your salary bycheck, dont forget to endorse itcheck, dont forget to endorse it

before change itbefore change it


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Taxes are also imposed by many sub national entities. Taxes consist of direct taxdirect tax or

indirect taxindirect tax, and may be paid in money or as its labor equivalent (often but not always

unpaid). A tax may be defined as a "pecuniary burden laid upon individuals or property topecuniary burden laid upon individuals or property to

support the government, a payment exacted by legislative authoritysupport the government, a payment exacted by legislative authority."

A tax "is not a voluntary payment or donation, but an enforced contribution, exactedpursuant to legislative authority" and is "any contribution imposed by government whether

under the name of toll, tribute, impost, duty, custom, excise, subsidy, aid, supply, or other

name."

The Four "R"sThe Four "R"s

Taxation has four main purposes or effects: Revenue, Redistribution, Reprising,Revenue, Redistribution, Reprising, and

Representation.Representation.

The main purpose is revenue: taxes raise money to spend on roads, schools and hospitals,

and on more indirect government functions like market regulation or legal systems. This is the

most widely known function.

A second is redistribution. Normally, this means transferring wealth from the richer

sections of society to poorer sections.

A third purpose of taxation is reprising. Taxes are levied to address externalities: tobacco

is taxed, for example, to discourage smoking, and many people advocate policies such as

implementing a carbon tax.A fourth, consequential effect of taxation in its historical setting has been representation.

The American revolutionary slogan "no taxation without representation" implied this: rulers

tax citizens and citizens demand accountability from their rulers as the other part of this

bargain.

Several studies have shown that direct taxation (such as income taxes) generates the

greatest degree of accountability and better governance, while indirect taxation tends to have

smaller effects.

WHAT IS A BILL?WHAT IS A BILL?

A bill in monetary term is a kind of debt that people acquire with an institution for the

benefit of a service like a credit card or a banking loan. Bills usually must be paid every

month and some of them incorporate an interest rate.

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In Guatemala, bills are supposed to be paid every month. For example:

Electrical energy service.

T.V. Cable service.

Credit cards.

Loans.

Internet service.

Telephone service.

Cell phone service, etc.

Illustrate or paste the receipts of the bills that you have observed at home,Illustrate or paste the receipts of the bills that you have observed at home, at the job or at the school.at the job or at the school.

WHAT IS A BUDGET?WHAT IS A BUDGET?

From French bougette it generally refers to a list of all planned expenses and revenues. It

is a plan for saving and spending and an important concept in microeconomics, which uses a

budget line to illustrate the trade-offs between two or more goods. In other terms, it is an

organizational plan stated in monetary terms. The main purpose of budgeting is to provide aprovide a

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ExerciseExercise


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forecast of revenues and expenditures like construct a model of how our business mightforecast of revenues and expenditures like construct a model of how our business might

perform financially speaking if certain strategies, events and plans are carried outperform financially speaking if certain strategies, events and plans are carried out.

Personal or family budgetPersonal or family budget

In a personal or family budget all sources of income (inflows) are identified and expenses

(outflows) are planned with the intent of matching outflows to inflows (making ends meet).

Types of budgetTypes of budget

Sales budget:Sales budget: The sales budget is an estimate of future sales. It is used to create company

sales goals.

Production budget:Production budget: It is created by Product oriented companies to estimate the number of

units that must be manufactured to meet the sales goals and the various costs involved with

manufacturing those units, including labor and material.Cash Flow/Cash budget:Cash Flow/Cash budget: The cash flow budget is a prediction of future cash receipts and

expenditures for a particular time period. The cash flow budget helps the business determine

when income will be sufficient to cover expenses and when the company will need to seek

outside financing.

Marketing budget:Marketing budget: It is an estimate of the funds needed for promotion, advertising, and public

relations in order to market the product or service.

Project budget:Project budget: It is a prediction of the costs associated with a particular company project.

These costs include labor, materials, and other related expenses. The project budget is often

broken down into specific tasks, with task budgets assigned to each.

Revenue budget:Revenue budget: The Revenue Budget consists of revenue receipts of government and the

expenditure met from these revenues. Tax revenues are made up of taxes and other duties

that the government levies.

Expenditure budget:Expenditure budget: A budget type which include of spending data items.

THE EXPERIENCE OF COMMUNICATINGTHE EXPERIENCE OF COMMUNICATING

Suppose that two people, separated by a considerable distance, wish to communicate with

one another. If there is a pair of conducting wires extending from one location to another and

if each place is equipped with a microphone and earpiece the communication problem may be

solved.

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The microphone, at one end of the wire communications channel, impresses an electric

signal voltage on the line, which voltage is then received at the other end. The received

signal, however, will have associated with it an erratic, random, unpredictable voltage

waveform which is described by the term noise.noise. The origin of this noise will be discussed

more fully in the career of electronics, in the future.

Here we need but to note that at the atomic level the universe is in a constant state of

agitation, and that this agitation is the source of a very great deal of this noise. Because of

the length of the wire link, the received message signal voltage will be greatly attenuated in

comparison with its level at the transmitting end of the link.

As a result, the message signal voltage may not be very large in comparison with the noisevoltage, and the message will be perceived with difficulty or possibly not at all. An amplifier

at the receiving end will not solve the problem, since the amplifier will amplify the signal and

noise alike. As a matter of fact, as we shall see, the amplifier itself may well be a source of

additional noise.

Exercise Exercise

Read again the article in the previous page and answer the following questions:

1. What is the meaning of wire communications channel?

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2. What type of communication are people trying to establish, according to the previous

reading?

3. What types of communication do you know?

4. According to your interpretation, what is the meaning of the expression greatly

attenuated?

Write on the lines the elements that form the Communications process.

INFORMATION SOURCESINFORMATION SOURCESCoverCover::

www.thevoiceofschoolchoice.files.worldpress.com/2009/01/south-carolina-

shool-finances.jpg

Subjects:Subjects:

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www.Wikipedia.com

Pictures:Pictures:

www.nochoiceatall.blogspot.com

www.theragblog.blogspot.com

www.etc.usf.edu

www.scavenging.wordpress.com

www.bradfitzpatrik.com/store/images/products7bo007-cartoon-money-clip-

art.jpg

www.emeraldinsight.com/fig/0670360909003.png

www.insidesocal.com/bargain/TwentyDollarBill.jpg

www.medianowpublic.net/images

www.marshu.com/articles/images-websitewww.marshu.com/articles/images-website/articles/presidents-on-us-paper-

money/one-thousand-1000-dollar-bill.jpg

www.pective.com

www.startswithabang.com

www.satic.howstuffworks.com

www.fredholmknitting.com

www.thefreemarketeers.wordpress.com

www.upload.wikimedia.org/wikipedia/commons/b/b2.Coins.jpg

www.clancunningham.us/images/checks.jpg

Exercises and conversations:Exercises and conversations:

English ASAP. Book 1

Teacher Fabricio Trinidad
http://www.wikipedia.com/http://www.nochoiceatall.blogspot.com/http://www.theragblog.blogspot.com/http://www.etc.usf.edu/http://www.scavenging.wordpress.com/http://www.bradfitzpatrik.com/store/images/products7bo007-cartoon-money-clip-%09%09%09art.jpghttp://www.bradfitzpatrik.com/store/images/products7bo007-cartoon-money-clip-%09%09%09art.jpghttp://www.bradfitzpatrik.com/store/images/products7bo007-cartoon-money-clip-%09%09%09art.jpghttp://www.emeraldinsight.com/fig/0670360909003.pnghttp://www.insidesocal.com/bargain/TwentyDollarBill.jpghttp://www.medianowpublic.net/imageshttp://www.marshu.com/articles/images-websitehttp://www.marshu.com/articles/images-website/articles/presidents-on-us-paper-%09%09%09money/one-thousand-1000-dollar-bill.jpghttp://www.marshu.com/articles/images-website/articles/presidents-on-us-paper-%09%09%09money/one-thousand-1000-dollar-bill.jpghttp://www.marshu.com/articles/images-website/articles/presidents-on-us-paper-%09%09%09money/one-thousand-1000-dollar-bill.jpghttp://www.pective.com/http://www.startswithabang.com/http://www.satic.howstuffworks.com/http://www.fredholmknitting.com/http://www.thefreemarketeers.wordpress.com/http://www.upload.wikimedia.org/wikipedia/commons/b/b2.Coins.jpghttp://www.clancunningham.us/images/checks.jpghttp://www.wikipedia.com/http://www.nochoiceatall.blogspot.com/http://www.theragblog.blogspot.com/http://www.etc.usf.edu/http://www.scavenging.wordpress.com/http://www.bradfitzpatrik.com/store/images/products7bo007-cartoon-money-clip-%09%09%09art.jpghttp://www.bradfitzpatrik.com/store/images/products7bo007-cartoon-money-clip-%09%09%09art.jpghttp://www.emeraldinsight.com/fig/0670360909003.pnghttp://www.insidesocal.com/bargain/TwentyDollarBill.jpghttp://www.medianowpublic.net/imageshttp://www.marshu.com/articles/images-websitehttp://www.marshu.com/articles/images-website/articles/presidents-on-us-paper-%09%09%09money/one-thousand-1000-dollar-bill.jpghttp://www.marshu.com/articles/images-website/articles/presidents-on-us-paper-%09%09%09money/one-thousand-1000-dollar-bill.jpghttp://www.pective.com/http://www.startswithabang.com/http://www.satic.howstuffworks.com/http://www.fredholmknitting.com/http://www.thefreemarketeers.wordpress.com/http://www.upload.wikimedia.org/wikipedia/commons/b/b2.Coins.jpghttp://www.clancunningham.us/images/checks.jpg

Documents

Unit 9 Finances