ACTG 1P91 Lecture Notes - Lecture 10: Zero-Coupon Bond, Cash Flow, Net Income

• School: Brock University
• Department: Accounting
• Course: ACTG 1P91
• Professor: Staci Kenno

Document Summary

Assets (resources) = liabilities + se (sources of resources) As we use resources, they become expenses. Revenues minus expenses = net increase or decrease in resources for a period. Generally two types: short-term (current) liabilities. Generally considered measurement issues for short-term in the context of the income statement discussion. Try to match nature of resource with funding source. Identify funding needs and balance acquisition of funds. All long-term funding has a cost attached. The greater will be the return the investor expects to generate. The expected return of the investor is the cost to the company. Generally, the more risk the company takes, the lower the cost of the funds. The more risk the investor takes, the higher the cost of the funds. Balance the risk the company is taking with the cost of the funding sources. Usually instalments of combined interest and principal. Prices will change based on changing interest rates and market expectations.