Chapter 11 of 20
Revision Notes
Short Term Sources of Finance — Revision Notes
Telangana Open School (TOSS) · Class 12 · Business Studies
Short Term Sources of Finance revision notes for Telangana Open School (TOSS) Class 12 Business Studies: 4 topics in quick points.
41 questions25 flashcards5 concepts
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Key Topics to Revise
1
Financial Needs of Business
- Businesses require finance for both fixed and working capital.
- Fixed capital is used to purchase long-term assets like land, buildings, and machinery.
- Working capital is the difference between current assets and current liabilities and is essential for daily operations.
2
Types of Business Finance
- Business finance is classified into short-term, medium-term, and long-term based on the duration of fund requirement.
- Short-term finance is needed for less than one year and is used for working capital.
- Medium-term finance spans 1–5 years and includes bank loans and public deposits.
3
Sources of Short-Term Finance
- Trade credit allows businesses to buy goods on credit from suppliers, usually for 30–90 days.
- Bank credit includes loans, cash credit, overdraft, and bill discounting.
- Factoring involves selling accounts receivable to a third party (factor) for immediate cash.
4
Merits and Demerits of Short-Term Finance
- Short-term finance is economical and flexible, with no interference in management.
- It can sometimes serve long-term needs through renewal.
- Demerits include fixed interest burden, asset charges, and uncertainty during crises.
Get complete notes with diagrams and examples
Full NotesKey Concepts
Working capital is the difference betweenTrade credit is the credit offeredBanks provide shortFactoring is a financial service whereThis is the money received from
Frequently Asked Questions
What are the important topics in Short Term Sources of Finance for Telangana Open School (TOSS) Class 12 Business Studies?
Key topics in Short Term Sources of Finance include Financial Needs of Business, Types of Business Finance, Sources of Short-Term Finance, Merits and Demerits of Short-Term Finance. Study these first, then practise questions on each for the Telangana Open School (TOSS) Class 12 board exam.
How should I revise Short Term Sources of Finance for the Telangana Open School (TOSS) Class 12 board exam?
Learn the core ideas first, then work through the 41 practice questions on Short Term Sources of Finance. Revise definitions regularly and use flashcards for quick recall before the exam.
Sources & Official References
Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.
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