Question

Capital needed at the commencement of business is :
a) temporary working capital
b) permanent working capital
c) seasonal working capital
d) initial working capital​

Answer 1

Answer:

option D (initial working capital).

Answer 2

Answer:

The correct option is (d) Initial Working Capital.

Explanation:

Initial Working Capital-

Working capital in the initial financial statements is referred to as initial working capital.

Working Capital-

• Working capital, often known as net working capital, is the distinction between current assets and current liabilities for a business.
• A company's working capital is a gauge of its liquidity and immediate financial stability.
• If a company's current assets to liabilities ratio is lower than one, it has negative working capital (or if it has more current liabilities than current assets).
• A corporation that has sufficient working capital is able to finance both its ongoing operations and its expansion plans.
• It's not always a good thing to have a high working capital. It can mean that the company has too much inventory, isn't spending its extra income, or isn't taking advantage of opportunities for low-cost debt.
• Working capital = Current Assets - Current Liabilities

Hence, we can say that Capital needed at the commencement of business is initial working capital​.

#SPJ3