Question

What are the three primary sources of assets?The three primary sources of assets are(1) investments by owners (issue of stock),(2) borrowing from creditors, and(3) earnings activities.

Answer 1

Answer:

True

Explanation:

The three main sources of assets for a business are:

1. investments by owners (total paid in capital), refers to the money that the owners are willing to invest in the company and it should be used to finance operating activities.
2. borrowing from creditors, refers to both long term and short liabilities that allow the company to increase their assets, e.g. merchandise or equipment purchased on credit, or a loan.
3. earnings activities, refers to the company's retained earnings from previous years that is reinvested in new or existing projects.