BU121 Lecture Notes - Lecture 6: Accounts Payable, Promissory Note, Income Statement

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Liquidity of assets and cash on balance is important: new venture financing involves search, negotiation, and privacy, a venture"s financial objective is to increase value, it is dangerous to assume that people act against their own self-interests: People only do what is good for them: venture character and reputation can be assets or liabilities. Early-maturity stage: obtaining bank loans, issuing bonds and issuing stock. Provides a snapshot" of the venture"s financial position on a specific date. Assets listed in order of liquidity (how fast they can be converted to cash) Fixed assets: long-term assets used in production (except for land, they usually wear. Current assets: converted to cash within 12 months (funds used to pay bills) cash, marketable securities, accounts receivable, notes receivable, inventory out through amortization/depreciation) buildings, land, equipment, furniture, machinery trademarks, etc. ) In-tangible assets: long-term assets with no physical existence (patents, copyrights, Owners" equity: records financing obtained by owners.

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