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Q.Why is working capital required?

(a) To settle daily expenses
(b) To purchase permanent assets
(c) For building construction
(d) For transportation
Rajasthan RbseRajasthan Board Senior Secondary Part-I Commerce Examination 2025MCQ· 1mImportance★★★★★est
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Working capital is required to meet the day-to-day running expenses of a business.

Business finance is divided into fixed capital (for acquiring long-term/permanent assets like land, building and machinery — options B and C) and working capital (for short-term, recurring needs — buying raw materials, paying wages, meeting daily operating expenses, and covering the gap until sales revenue is realised). Transportation is typically a recurring operating cost covered by wor …

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