Lesson eLearning

Which of the following is NOT a source of short‑term finance for a manufacturing firm?

easy MCQ 1 mark Class 12 · Business Studies · Financial Management
  1. Trade credit
  2. Bank overdraft
  3. Commercial paper
  4. Equity shares
Answer
Equity shares

The correct answer is Equity shares — Therefore the correct answer is Equity shares.

Step-by-step solution

  1. Short‑term finance is meant for meeting immediate working‑capital needs.
  2. Trade credit, bank overdraft, and commercial paper are all recognised short‑term sources.
  3. Equity shares, however, are a long‑term financing instrument and are not considered short‑term.
  4. Therefore the correct answer is Equity shares.
Common mistake: Confusing long‑term equity with short‑term finance

Concept tested: Short‑term financing sources

Published · How this solution was prepared and checked

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