ENTREPRENEURIAL FINANCE
SOURCES OF FUNDING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A bank overdraft is a good source of long term finance?
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True
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False
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -Bank overdraft can be regarded as a short term financing instrument which can be availed by a bank account holder with a bank. It is not purely a loan like the conventional loan types, for eg home loan, business loan, personal loan, etc.
Detailed explanation-2: -Short Term Liability: Any liability which can be repaid within a period of one year is known as short term liability. For example, sundry creditors, bank overdraft, etc.
Detailed explanation-3: -Overdraft is a facility through which customers can withdraw money up to a certain limit, even if the balance in their accounts is zero. It is a short-term loan taken for a short period. An overdraft facility can be availed on a secured or unsecured basis.
There is 1 question to complete.