Funds used for paying wages; salaries and payments for raw materials are categorized under?

A. liquid capital
B. circulating capital
C. fixed capital
D. nominal capital

Correct Answer:

Option B – circulating capital

Explanation

Circulating capital includes intermediate goods and operating expenses, i.e., short-lived items that are used in production and used up in the process of creating other goods or services. e.g Raw materials, work in process, finished goods, and cash at hand that continually flow within an organization.