Question

What are owner funds and borrowed funds?

Answer 1

Owner funds are those funds that are invested in the business by the owners, it is also called shareholder’s equity. Whereas borrowed funds are funds that are raised by the business by lending money from either banks or individuals.

The purpose of borrowed funds is to increase the investment in the business.

Also read:

• Intangible Assets
• Tangible Assets
• Difference Between Assets and Liabilities

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