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Questions and Answers
Which of the following is NOT an internal source of finance?
Which of the following is NOT an internal source of finance?
- Sale of assets
- Bank loans (correct)
- Personal funds
- Retained profit
Which type of business entity usually relies on personal funds from their own savings to finance their start-up businesses?
Which type of business entity usually relies on personal funds from their own savings to finance their start-up businesses?
- Sole traders (correct)
- Limited liability companies
- Corporations
- Partnerships
Which source of finance does not need to be repaid?
Which source of finance does not need to be repaid?
- Personal funds (correct)
- Sale of assets
- Bank loans
- Retained profit
Which of the following is an example of an external source of finance?
Which of the following is an example of an external source of finance?
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What are the three main sources of internal finance?
What are the three main sources of internal finance?
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Study Notes
Internal and External Sources of Finance
- An internal source of finance is NOT a loan from a bank.
Business Entity and Start-up Finance
- A sole trader usually relies on personal funds from their own savings to finance their start-up businesses.
Repayment of Finance
- A grant is an example of a source of finance that does not need to be repaid.
External Sources of Finance
- A loan from a bank is an example of an external source of finance.
Main Sources of Internal Finance
- The three main sources of internal finance are:
- Retained profits
- Sale of assets
- Reduction of working capital
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