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Which of the following is an example of a financial resource for a business?Bank overdraftMachineryStock

Question

Which of the following is an example of a financial resource for a business?

  • Bank overdraft
  • Machinery
  • Stock
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Solution

To determine which of the options listed is an example of a financial resource for a business, let's analyze each option:

  1. Bank Overdraft: This is a facility provided by a bank that allows a business to withdraw more money than it has in its account, effectively borrowing money. It is considered a financial resource as it provides liquidity and funds for the business to operate.

  2. Machinery: This is a physical asset used in the production of goods or services. While it is crucial for business operations and is considered a capital resource, it is not a financial resource.

  3. Stock: This typically refers to inventory or shares of ownership in a company. Inventory is an operational resource, while shares represent ownership equity but aren't a direct financial resource like cash or credit.

Summary:

Among the options, Bank Overdraft is the only one that can be classified as a financial resource because it pertains directly to financial assets that can be utilized for funding business activities. Therefore, the correct answer is Bank Overdraft.

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