Question

Differentiate between fixed capital and working capital . Giving examples

Answer 1

Answer:

Explanation:

Working capital is used explicitly for short term investments like the purchase of current assets or payment of current liabilities. Fixed capital is invested on assets which are permanent in an organisation and aren't liquid. So, these are comparatively difficult to convert into liquid cash.

Answer 2

Answer:

Fixed Capital refers to the capital, which is invested in procuring fixed assets for business. On the other hand, working capital represents the amount of money utilized for financing day to day business operations. It is required to support the proper functioning of the company’s business operations

fixed capital eg-Property, plant, and equipment are standard fixed capital items.

working capital eg-Sundry Creditors

Bills Payable

Trade credit

Notes Payable