BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Retained earnings
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Overdraft
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Leasing
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Debentures
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Detailed explanation-1: -Retained earnings is a permanent source of fund available to an organization. It is an internal source of financing.
Detailed explanation-2: -External sources of finance refer to money that comes from outside a business. There are several external methods a business can use, including family and friends, bank loans and overdrafts, venture capitalists and business angels, new partners, share issue, trade credit, leasing, hire purchase, and government grants.
Detailed explanation-3: -Retained profits/earnings are called the internal source of finance for a business because they are the end product of running a business.
Detailed explanation-4: -Retained earnings are a permanent source of funds available to the organisation as it is the amount that has been retained from the net earnings by the organisation and can be flexibly used.