Question based on DIMS Solved Assignment and other course
Answer:
Sources of Fund
Sources of fund are indicated by increase in liability and decrease in assets. The main sources of funds are:
- Fund from operation activities
- Issue of shares capital
- Issue of debentures
- Raising of long term loans
- Receipts from partly paid shares , called up
- Amount received from sales of non current or fixed assets
- Non trading receipts such as dividend received
- Sale of investments ( Long term )
- Decrease in working capital (as per schedule of changes in working capital)
Applications or Uses of Funds
Applications of fund are indicated by decrease in liability and increase in assets. The main uses of funds are:
10. Funds lost in operations ( Balance negative in second step )
11. Redemption of preference share capital
12. Redemption of debentures
13. Repayment of long term loans
14. Purchase of long term loans
15.Purchase of long term investments
16. Non trading payments
17. Payment of tax
18. Payment of dividends
19. Increase in working capital (as per schedule of changes in working capital)