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Which of the following sources of funding is considered an external source for a business organization?
  • a)
    Retained earnings
  • b)
    Bank loan
  • c)
    Equity capital
  • d)
    Trade credit
Correct answer is option 'B'. Can you explain this answer?
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Which of the following sources of funding is considered an external so...
Bank loan is an external source of funding because it involves borrowing money from a financial institution, which is not generated internally by the business itself. Retained earnings (a) are internal funds generated from profits. Equity capital (c) refers to funds raised by issuing shares to shareholders, which can be both internal and external. Trade credit (d) is a form of financing extended by suppliers to the business.
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Which of the following sources of funding is considered an external source for a business organization?a)Retained earningsb)Bank loanc)Equity capitald)Trade creditCorrect answer is option 'B'. Can you explain this answer?
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