Which of the following are external sources of funds for businesses? (A) Grants, debentures, leasing, mortgage (B) Venture capital, loans, drawings, factoring (C) Accounts payable, owners' equity, leasing, discounts (D) Bank overdraft, retained profits, factoring, bank bills - HSC - SSCE Business Studies - Question 20 - 2008 - Paper 1

External sources of funds refer to financing options that come from outside the business. Key characteristics include:

1. Grants: Non-repayable funds provided by government entities or foundations.
2. Debentures: Long-term securities yielding a fixed rate of interest, issued by a company and secured against assets.
3. Leasing: Agreements to use an asset without owning it, often involving rental payments.
4. Mortgages: Loans specifically for purchasing property, where the property itself serves as collateral.

Analyzing the provided options:

• Option A includes grants (external), debentures (external), and leasing (external).
• Option B includes venture capital (external), loans (external), but also drawings and factoring (the latter is internal).
• Option C includes accounts payable (internal), owners' equity (internal), and leasing (external), which disqualifies it.
• Option D discusses bank overdrafts (external) but also includes retained profits (internal).

Thus, the correct identification of external funds comes from Option A.