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Commerce · Class 11 Commerce

Ch 9Sources of Finance — Class 11 Commerce, concept-first.

Having studied what business finance is and how much fixed and working capital a firm may need, the natural next question this chapter of the Andhra Pradesh Intermediate Commerce syllabus takes up is: from where does a business actually get this money? The various means through which a firm raises the funds it requires…

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Key concepts

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Owned Funds and Borrowed Funds

Sources of finance are first classified on the basis of ownership into owned funds and borrowed funds. Owned funds — a proprietor's or partner's capital, or a company's equity capital, preference capital and retained ear…

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Chapter contents

The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.

1

Meaning and Classification of Sources of Finance

Having studied what business finance is and how much fixed and working capital a firm may need, the natural next question this chapter of the Andhra Pradesh Intermediate Commerce syllabus takes up is:…

2

Equity Share Capital

Equity share capital is the most basic and, for most companies, the largest single source of owned, long-term finance, and this chapter of the AP Intermediate Commerce course examines it in detail as…

3

Preference Share Capital

Between the certainty of borrowed capital and the risk of equity capital lies preference share capital, a hybrid source of owned, long-term finance that this AP Intermediate Commerce chapter studies a…

4

Retained Earnings (Ploughing Back of Profits)

A third important owned source of long-term finance, and one that costs a company nothing to raise from outsiders, is retained earnings — the practice this chapter of the Andhra Pradesh Intermediate C…

5

Debentures

Moving from owned funds to borrowed funds, the first and most important long-term borrowed source studied in this AP BIEAP Commerce chapter is the debenture.

6

Loans from Financial Institutions and Public Deposits

Besides debentures, two other borrowed sources feature regularly in AP Intermediate Commerce examination papers on this chapter: term loans from banks and financial institutions, and public deposits.

7

Trade Credit and Other Short-Term Sources

Alongside long-term and medium-term sources, every business also needs short-term finance to meet its ordinary working capital needs, and this AP Intermediate Commerce chapter identifies trade credit…

8

Choosing an Appropriate Source of Finance

With so many sources of finance available — owned and borrowed, long-term, medium-term and short-term — the concluding idea of this AP Board Intermediate Commerce chapter is that a firm cannot pick an…

Sample & Board Papers

Sample papers and previous-year board questions for this subject.

+Show 5 questions5 questions
  1. Q1Explain the classification of sources of finance.Preview
  2. Q2Differentiate between a share and a debenture.Preview
  3. Q3Write a short note on: Equity SharesPreview
  4. Q4What are the various factors that determine the selection of sources of finance?Preview
  5. Q5Differentiate between Shares and Debentures.Preview

More questions

12 Q
+Show 4 questions4 questions
  1. Q1What are Owned Funds and Borrowed Funds?Free
  2. Q2Define an Equity Share.Free
  3. Q3What is meant by a Preference Share?Preview
  4. Q4What is meant by Trade Credit?Preview
+Show 4 questions4 questions
  1. Q5Distinguish between Owned Funds and Borrowed Funds.Free
  2. Q6Explain the merits and limitations of Equity Share Capital as a source of finance.Free
  3. Q7What are the merits and limitations of Debentures as a source of finance?Preview
  4. Q8Distinguish between Long-term Sources and Short-term Sources of finance, with examples.Preview
+Show 4 questions4 questions
  1. Q9Explain the classification of Sources of Finance on the basis of ownership and period, with examples of each.Free
  2. Q10Explain Equity Shares, Preference Shares and Debentures as sources of finance, bringing out the points of difference between them.Free
  3. Q11Discuss the various short-term sources of finance available to a business.Preview
  4. Q12What factors should a business consider while choosing an appropriate source of finance?Preview