Answer to Question #34880 in Finance for babu

Question

source of capital of partnership ?

Answer 1

1. Personal contributions of partners.
2. Funds from financial institutions (usually as loans and overdrafts).
3. Trade credit.
4. Retained earnings/Ploughed back profits - These are profits of the business which are kept back that can be put into the business where the need arises. These profits are important sources of capital.