Question

What are the two important sources from where the owner's funds can be obtained?

• A. Retained earnings and issue of equity shares
• B. Retained earnings and issue of preference shares
• C. Retained earnings and debentures
• D. None of the above

Answer 1

The correct option is A

Retained earnings and issue of equity shares

Owner's funds are the funds that are provided by the owners of an enterprise, which may have sole trader or partner or shareholder of a company. The owner's capital is invested for a long period of time. Such capital forms the basis on which owners acquire their right of control of management. An issue of equity shares and retained earnings are the two important sources where owner's funds can be obtained.