MBUS 3000: EXAM 2
35 Cards in this Set
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Long-Term Liabilities
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Where funds are needed for a long-term purpose such as construction of a building, a long-term liability account would be used. Presumably, increased earnings would be used to retire the debt. Almost always, long-term liabilities are interest bearing and have a fixed due date.
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Long-Term Notes Payable
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The company may be able to obtain the needed amount from one lender rather than issuing bonds for sale to the public. Sometimes notes may be issued to await better terms for issuing bonds.
i.e. van loan.
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Types of Assets
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Fixed
Current
Other
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Types of Liabilities
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Current
Long-term
Contingent
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Types of Equity
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Partners equity
Capital
Profit
Retained profit
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Current Assets
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Assets reasonably expected to be converted into cash or used in the current operation of the business (usually taken as one year).
Cash
Checking
PayPal Account
Inventory
T-Shirts
CDs
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Fixed Assets or Plant Assets
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Long-lived assets used in the production of goods or services. These assets are used in the operation of the business rather than being held for sale, as are inventory items.
Music equipment
The van
Recording equipment
Real estate
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Other Assets
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Sometimes other long-term assets but essentially just a miscellaneous category.
outside investments- "Jingle" company
intangible assets- songs and recordings (can be included in balance sheet as assets especially if you purchase them). Developed songs, recordings, films or software w/a…
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Innovator's Dilemma
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Bc companies tend to innovate faster than their customers' lives change, most organizations eventually end up producing products or services that are too good, too expensive and too inconvenient for customers. By only pursuing "sustaining innovations" that perpetuate what has historically…
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Disruptive Innovations
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Term of art coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves 'up market', eventually displacing established competitors.
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State of the Art
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"Does more"
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Inferior
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"Does less"
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Email
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U.S. Postal Service
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MP3s
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CDs
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Home Recording Software
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Pro Studio Equipment
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Voce Hammond B3 Simulator
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Hammond B3 Organ
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Ebook
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Paperback
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Iphone/Android Apps
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Full featured computer software
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EasyBooks
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Quickbooks
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Teac 2340 Series 4 Track
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Studer 24 track Recorders
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Sister Sledge: "We are Family"
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The Sugarhill Gang- "Rappers Delight"
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Sylvia Robinson
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Producer/founder of Sugarhill Records.
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Blues
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Jazz
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Rock N Roll
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Big Band
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Rap
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RB/Funk/Disco
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Punk
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Stadium Rock/Progressive Rock
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Grunge/Alternative
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"Hair" metal
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Outlaw Country
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Country
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Musical Innovations
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The upstart musical form is often simpler and cruder. Fewer instruments. Lower production values in recording. Lower production value at concerts. The upstart musical form relies less on musicianship and more on emotion and energy.
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4 Basic Accounting Statements/Reports
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Income Statement or Profit and Loss Report
The Balance Sheet
Statement of Cash Flows or Cash Flow Report
Statement of Owner's Equity or Owner's Equity Report
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Accrual Basis Accounting
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Revenue is recognized when earned not received. Expenses are recognized when incurred not when paid.
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Unearned Revenues
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Sometimes revenue is received in advance, such as magazine subscriptions or rent. These are liabilities as they represent claims against the enterprise.
i.e. deposits for shows.
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Bonds: Less to Greater Risk
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US Treasury Bonds 3 months.
US Treasury Bonds 30 years.
French Government Bonds.
Italian Government Bonds.
Spanish Government Bonds.
Greek Government Bonds.
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Borrowing: Less to Greater Risk
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Prime FHA mortgage.
SubPrime mortgage.
Secured line of credit/Home equity.
Unsecured line of credit.
Credit card debt.
Payday Loans.
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Interest Rate
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Reflects expectations of inflation.
Reflects borrower risk.
Higher interest= higher risk or higher inflation.
High risk= high rate.
Low risk= low rate.
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MBUS 3000: EXAM 2