Question

state three reasons of calling raw material and money as working capital

Answer 1

both r basic needs without them we cant imagine any industry
both r must for starting
money needs eachvn every step of production tobsupply

Answer 2

The reason are:
Raw materials and money which are used to pay the wages of workers and to meet the day to-day expenses come under working capital. They are called working capital because

It is exhausted on being used just once or changes its form when it is used.

The question of depreciation does not rise. It is reused to continue production.

The owner gets back the working capital when the product is sold.


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