Which of the following is not a source of capital to a partnership?
Answer Details
The source of capital that is not available to a partnership is "Shares." Shares are a type of security that represents ownership in a company, and they are typically issued by corporations. Partnerships are a form of business organization in which two or more individuals own and operate the business together. Since partnerships are not considered separate legal entities, they cannot issue shares of stock to raise capital like a corporation.
Partnerships have other sources of capital available to them, such as personal savings, borrowing, buying on credit, and ploughing back profits. Personal savings refer to the money partners invest in the business from their personal funds. Borrowing involves obtaining loans from financial institutions or other sources. Buying on credit refers to the practice of purchasing goods or services on credit from suppliers. Ploughing back profits means reinvesting profits earned by the partnership back into the business to help it grow. Overall, partnerships can raise capital through a variety of sources, except for issuing shares of stock as they are not considered separate legal entities like corporations.