Match the words with the term.
-Which of the following is a source of internal financing?
A) revenue
B) depreciation/amortization
C) mortgages
D) long-term borrowings

Question

Quizplus · Accepted Answer

Depreciation/amortization is a source of internal financing because it represents the allocation of a portion of the cost of an asset to each period of its useful life. This allocation creates a non-cash expense that reduces the company's taxable income, resulting in a corresponding increase in retained earnings.

Match the Words with the Term