IB B&M 3.1 Review: Sources of Finance

Which of these is an internal source of finance?

• Retained Profits

• Overdraft

• Trade Credit

• Share Capital

What is an internal source of finance?

• Money obtained from sources within the business.

• Money obtained from sources outside of the business.

• Money obtained from sources above the business.

• Money obtained from sources below the business.

What is an external source of finance?

• Money obtained from sources within the business.

• Money obtained from sources outside of the business.

• Money obtained from sources above the business.

• Money obtained from sources below the business.

Source of finance mostly used by sole traders:

• Personal funds

• Retained profit

• Share capital

• Debentures

Type of loan that is paid back over a long period of time at a fixed rate of interest:

• Personal funds

• Retained profit

• Share capital

• Debentures

Money raised from sale of shares of a limited company:

• Personal funds

• Retained profit

• Share capital

• Debentures

Source of finance from a firm’s money after it has paid taxes, dividends, and other expenses to reinvest back into a business:

• Personal funds

• Retained profit

• Share capital

• Debentures

Source of finance in which money comes from a business performing activities such as selling redundant property or machinery:

• Sale of Assets

• External Source of Finance

• Loan Capital

• Overdrafts

Finances sourced from financial institutions such as banks that must be payed back over time:

• Sale of Assets

• External Source of Finance

• Loan Capital

• Overdrafts

Finances sourced from withdrawing more money than one has in their bank account:

• Sale of Assets

• External Source of Finance

• Loan Capital

• Overdrafts