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Question
Multiple Choice Question:
Funds required for purchasing current assets is an example of ______
Options
Fixed capital requirement
Ploughing back of profits
Working capital requirement
Lease financing
Solution
Current assets are generally used for the day-to-day operations of a business. The funds that a company requires for undertaking day-to-day operations, such as the purchase of raw materials and payment of wages and salaries, are part of its working capital requirements. Thus, the funds that a firm requires for purchasing current assets are part of its working capital requirements.
Hence, the correct answer is option Working capital requirement.
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RELATED QUESTIONS
Business finance deals with __________ activities of business.
Match the correct pairs of words from group 'A' and group 'B'.
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Group A
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Group B
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| (a) Retained profits. | (1) Share warrant holder | |
| (b) Small depositors |
(2) Borrowed capital
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| (c) Dividend coupon |
(3) Deposits less than Rs. 25000
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| (d) Returns on shares |
(4) Interest
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| (e) Bear | (5) Expects rise in price of security. | |
| (6) Ploughing back of profit | ||
| (7) Expects fall in price of securities. | ||
| (8) Deposits less than Rs. 20,000. | ||
| (9) Share certificate holder | ||
| (10) Dividend | ||
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