Question

State the difference between fixed and working capital

Answer 1

Answer:

working capital changes when there is admission retirement of a partner, fixed capital dose not change

Answer 2

Answer:

The difference between fixed capital and working capital :

• Fixed capital - fixed capital refers to the fund required for acquisition of fixed asset fixed assets are made for generating income this acids are used permanently for business operation. Where as Working capital - working capital means the capital invested in the working asset or current asset such as cash stock of goods. it represents the liquid fund which are required for the day to day operation of an enterprise.

• fixed capital is invested for a long time of period where is working capital is invested for short period of time.

• Fixed capital does not circulate or change its form where is working capital keeps on circulating or changing its form.

• fixed capitals are in form of share, debenture and long term loans whereas working capital are in form of public deposit, trade credit and banks.