Q.Which of the following is classified as an OWNED source of business finance?
(A) Debentures
(B) Trade credit
(C) Equity shares
(D) Public deposits

Owned sources are those contributed by the owners of the business, and they do not carry a fixed, compulsory repayment obligation the way borrowed funds do.

Equity shares represent ownership capital, so they belong to the owned category, unlike debentures, trade credit and public deposits, which are all amounts borrowed from outsiders that must be repaid with interest.

To answer this question we go through each option and check whether it represents funds contributed by the owners of the business or funds borrowed from an outside party who must be repaid.

(A) Debentures are certificates of loan issued by a company; a debenture holder is a creditor, not an owner, and receives a fixed rate of interest that must be paid regardless of profit. This is a borrowed source, so it is incorrect.

(B) Trade credit is credit extended by a supplier for goods purchased, to be repaid after an agreed period. The supplier is an outside creditor of the business, not an owner. This is also a borrowed source, so it is incorrect.

(C) Equity shares represent the ownership capital of a company. Anyone who buys equity shares becomes a part-owner of the company, entitled to a variable dividend and voting rights, and bearing the ultimate risk and reward of the business. This is exactly what defines an owned source, so this option is correct.

(D) Public deposits are amounts invited from the general public for a fixed period at a fixed rate of interest; depositors are creditors of the company, not owners. This is a borrowed source, so it is incorrect.

Eliminating (A), (B) and (D) as borrowed sources confirms that only (C) equity shares is an owned source.

Students sometimes confuse 'long-term' with 'owned' — debentures and long-term institutional loans are long-term but still borrowed, since they must be repaid with interest to an outside lender. Always ask 'who receives this — an owner or a creditor?' rather than 'how long does the firm keep this money?' when classifying by ownership.