Question

WRITE ABOUT FUNCTIONS OF DEFFERED PAYMENTS
IMPROPER ANSWER WILL BE REPORTED ​

Answer 1

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Money as a standard of deferred payments means that money acts as a 'standard' for payments, which are to be made in future. Every day, millions of transactions take place in which payments are not made immediately. Money encourages such transactions and helps in capital formation and economic development of the economy. Money as a standard of deferred payments has simplified the borrowing and lending operations. It has led to the creation of financial institutions. Under barter system, it was very difficult to make future payments and contractual payments such as salaries, loans, interest payments, etc. For example, it was difficult to decide whether wages to a labour are to be paid in terms of food grains or any other commodity. This is because it was difficult to value the services of labour in terms of a commodity. Similarly, if a loan is taken in the form of a commodity, then the problem will arise in its repayment. However, as superior to the Barter System, money made the system of deferred or contractual payments such as salaries, interest payments, etc.

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Answer 2

HERE'S YOUR ANSWER
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✒ Defered payments are payments made later on and not at the point of time when the product or service is delivered to the customer.

It takes commodities on credit.

Account of these deferred payments are expressed in terms of money.


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