Question

Which among the following is not an item of fixed capital?

(a) Tools (b) Raw Materials

(c) Machines (d) Building

Answer 1

The answer to the above question is option b) Raw materials.

Raw materials are the type of elements used in an organization continuously unlike any other elements.

Tools, machines, and building are purchased while setting up the business firm so on that note option B is the correct answer.

Hope this helps you.

Answer 2

Answer:

(b) Raw Materials

Raw Materials is not an item of fixed capital.

Explanation:

In contrast to other elements, raw materials are the type of elements that are used continuously in an organization.

Raw Materials is not an item of fixed capital. Fixed Capital denotes the investment of funds generated by the company in long-term assets. It is a mandatory requirement of an organization during its initial stage. It is the portion of the total fund that is not used for production but is held in trade for more than one accounting period. Its personality endures and is preserved in the company's intangible and tangible assets. Raw materials and cash on hand are examples of working capital. In comparison to instruments, machinery, and buildings, they are used in manufacturing.