Multiple choice

Read the following statements: (i) “Working Capital is the amount of funds necessary to cover the Cost of operating the enterprise.” (ii) “Circulating capital means current assets of a company that are changed in the ordinary course of business from one form to another.”

  1. (i) and (ii) both are correct.

  2. (i) and (ii) both are false.

  3. (i) is correct, but (ii) is false.

  4. (i) is false, but (ii) is correct.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Statement (i) is correct - working capital funds day-to-day operations. Statement (ii) is false - circulating capital refers to capital that circulates/changes form, not current assets specifically. Current assets include cash, inventory, receivables which do change form, but the definition is imprecise.

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