Basic financial instruments, also known as traditional financial instruments, are Derivative financial instruments The basis of production and application. It develops with the development of credit relationship on the basis of the function of money as a means of payment in the commodity economy society. Contents of basic financial instruments:
The main basic financial instruments include currency, commercial and bank notes, stocks and bonds.
(1) Currency. Currency is not only the medium of exchange, but also the basis for accounting to measure and report all transactions. Money belongs to financial assets, including cash and deposits. The latter represents the right of the depositor to obtain cash from its opening bank or other financial institutions within its deposit limit or to issue bills from its deposit amount to repay a financial liability. As a financial asset, money represents the medium of exchange and forms the basis for the measurement and reporting of all items in the accounting statements.
(2) Notes. A bill is a written contract signed by the drawer and unconditionally promises to pay the payee on a specified date, including checks, bills of exchange and promissory notes. Although checks, bills of exchange and promissory notes are different in terms of the parties and the liabilities of the creditor's rights and debts, they are the same in terms of bill issuing, endorsement, payment, right of recourse, refusal of payment certificate and other bill behaviors. From the accounting point of view, the bill behavior is represented by the financial assets of one party and the other
Financial liabilities of one party, such as accounts receivable and payable, notes receivable and payable.
(3) Shares. Stock is a kind of negotiable securities issued by a joint-stock company to shareholders to prove their investment in capital stock, indicating the ownership and management right relationship between investors and investees. Stock belongs to virtual capital, which has no value and cannot create value in the process of reproduction, but it can participate in the distribution of surplus value. In the financial market, stocks can be used as trading objects and collateral, and their price mainly depends on the future stock interest rate and bank deposit interest rate of this kind of stocks. Compared with bonds, stocks are more risky and do not have a fixed maturity as bonds do.
As an equity instrument, stocks represent the equity of the holder in the issuer and financial assets in the holder.
(4) Bonds. A bond is a voucher issued by a financier (i.e. a debtor) to an investor (creditor) that promises to repay the principal and pay interest in a certain period of time in the future. The bonds are usually marked with terms such as issuing unit, issuing date, principal amount, coupon rate, repayment period, etc. Bonds indicate the creditor's rights and debt relationship between investors and investees. Investors only have the right to transfer bonds and recover principal and interest at maturity according to regulations, but not enterprises Operation management decision Right. The issuance and holding of bonds are represented by the issuer's financial liabilities and the holder's financial assets. However, it is worth noting that hybrid securities (such as Convertible Securities ）It has the nature of both liabilities and equity. 
