Question

Using suitable examples classify capital into "Fixed and Circulating Capital".

Answer 1

1:Fixed capital is capital or money that we invest in fixed assets. In other words, money that we invest in assets of a durable nature. These are assets that we repeatedly use over a long period. We can also use the term 'fixed investment' with the same meaning.
Property is an example of a fixed asset.

2:Circulating capital is the amount of funding needed by a business to pay for its immediate operational needs. It is also known as floating capital.

Circulating capital can consist of cash, operating expenses, raw materials, inventory in process, finished goods inventory and accounts receivable.