Accounts – Important definitions you should know

1. Financial instrument A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Let us understand with one example. A receivable for one entity gives rise to payable for another entity. Here receivable is a financial asset and payable […]

Sources Of Finance

Internal sources The main internal sources of finance for a start-up are as follows: Personal sources These are the most important sources of finance for a start-up, and we deal with them in more detail in a later section. Retained profits This is the cash that is generated by the business when it trades profitably – another […]