Short-Term Financing（PPT 40）

Short-Term Financing
Short-Term Financing
Spontaneous Financing
Negotiated Financing
Factoring Accounts Receivable
Composition of Short-Term Financing
Spontaneous Financing
Accounts Payable     (Trade Credit from Suppliers)
Accrued Expenses
Spontaneous Financing
Open Accounts: the seller ships goods to the buyer with an invoice specifying goods shipped, total amount due, and terms of the sale.
Notes Payable: the buyer signs a note that evidences a debt to the seller.
Spontaneous Financing
Draft -- A signed, written order by which the first party (drawer) instructs a second party (drawee) to pay a specified amount of money to a third party (payee).  The drawer and payee are often one and the same.
Terms of the Sale
Net Period - No Cash Discount -- when credit is extended, the seller specifies the period of time allowed for payment.  “Net 30” implies full payment in 30 days from the invoice date.

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