Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Detailed explanation-1: -It must be financed through long-term sources of capital such as equity or preference shares, debentures, long-term loans and retained earnings of the business. Fixed Assets should never be financed through short-term sources.
Detailed explanation-2: -The sources of short-term working capital include tax provisions, public deposits, cash credits, and others. Whereas, spontaneous working capital includes notes payable and bills payable.
Detailed explanation-3: -Answer and Explanation: False, short-term borrowing forms part of the working capital. Here, short-term borrowing forms part of the cash credits, which may form part of the working capital.
Detailed explanation-4: -Equity Capital It is the first source of fixed capital. This refers to the financial resources arranged by the owners. In the case of companies, the shareholders are the ones who contribute to the issue of equity capital.