Question

which of the following is not a way to finance inventory?
blanket coverage
carpet coverage
floor planning
consignment
question 35
which of the following is an internal source of funds?
shareholders
retained earnings
banks
suppliers

Explanation:

• For the first question:
• Blanket coverage is a form of inventory financing where a lien is placed on all of a company's inventory.
• Floor planning is used in industries like automotive, where lenders finance inventory (e.g., cars on the dealer's lot).
• Consignment is when a supplier provides inventory to a retailer, and the retailer pays only when the inventory is sold.
• Carpet coverage is not a recognized method of inventory - financing.
• For the second question:
• Shareholders provide external equity financing.
• Banks offer external debt financing.
• Suppliers may offer trade credit (external).
• Retained earnings are earnings that a company has earned over time and kept (not distributed as dividends), which is an internal source of funds.

Answer:

• First question: Carpet coverage.
• Second question: Retained earnings.