Question

True or False Sources of funds include the following:Commercial banks ,Owners of the company(common stockholders),Suppliers and...

True or False
Sources of funds include the following:Commercial banks ,Owners of the company(common stockholders),Suppliers and the company itself(the cash flow from operations)
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Answer #1

Answer: TRUE

EXPLANATION

1.Generally we have many sources for gathering of funds (capital )for running the business

2. Sources are categorized into three types , they are long term sources medium term sources and short term sources

3.long term sources include long term loans from commercial banks , financial institutions and ownership capital , issue of bonds debentures and shares etc

4.medium term sources include medium term loans from banks and financial institutions leasing and hire purchase etc

5. Short term sources include short term loans , commercial papers and treasury bills and call money markers

6.suppliers are also sources to the business they are the external sources

7. Cash from operations and retained earnings are the internal source of funds

8. Generally external sources of funds are more costly than internal source of funds

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