Podcast
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?
What are the three main sources of internal finance?
What are the three main sources of internal finance?
Flashcards
External Finance
External Finance
Money obtained from sources outside the business.
Internal Finance
Internal Finance
Money obtained from within the business.
Bank Loan
Bank Loan
A loan provided by a bank that needs to be repaid over time with interest.
Personal Funds
Personal Funds
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Retained Profit
Retained Profit
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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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