Money

Meaning:

Money is defined as anything that is widely accepted as payment for goods, services, or repayment of debts. It can take the form of cash, coins, digital balances, or

electronic transfers. Money allows people to buy, sell, save, and invest, eliminating the need for barter (exchanging goods directly).

Functions of Money:

Medium of Exchange : Used to facilitate buying and selling.

Store of Value : Can be saved and retained for future use.

Unit of Measurement:  Helps to determine the value of goods and services.

Standard for Future Payments: Sets prices for future transactions.

Difference Between Money and Cash:   Money is a broad term that includes all forms of value used for transactions, such as cash,  bank balances, UPI payments, cards, cheques, and digital wallets.

Cash refers specifically to the physical form of money, including paper notes and coins.

All cash is money, but not all money is cash; money encompasses total wealth in various  forms, while cash represents physical currency used for daily payments.

Types of Money: 

Physical Money: Cash and coins.  

Digital Money: Bank balances, UPI, and net banking.

Fiat Money: Currency issued by the government.

Commodity Money: Historical items like gold that were used as money.

Importance in Finance:  

Money serves as the foundation of the financial system, enabling borrowing, lending,  investing, pricing, and driving economic growth.

Role in Goods and Business:  

Money helps businesses purchase raw materials, pay salaries, manage operations, and sell  products, ensuring the economic cycle continues.