{"id":45721,"date":"2024-04-15T22:02:03","date_gmt":"2024-04-15T22:02:03","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=45721"},"modified":"2024-04-15T22:02:03","modified_gmt":"2024-04-15T22:02:03","slug":"having-defined-working-capital-as-current-assets-it-can-be-further-classified-according-to-__________","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/having-defined-working-capital-as-current-assets-it-can-be-further-classified-according-to-__________\/","title":{"rendered":"Having defined working capital as current assets, it can be further classified according to __________."},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a978bcfd3202\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    Financing method and time                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    rate of return and financing method                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    time and rate of return                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"true\">\r\n                    components and time                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is D. components and time.<\/p>\n<p>Working capital is a measure of a company&#8217;s short-term liquidity. It is calculated by subtracting current liabilities from current assets. Current assets are assets that are expected to be converted into cash within one year, while current liabilities are liabilities that are due within one year.<\/p>\n<p>Working capital can be classified into two components: operating working capital and financial working capital. Operating working capital is the difference between current assets and current liabilities that is used to finance the company&#8217;s day-to-day operations. Financial working capital is the difference between current assets and current liabilities that is used to finance the company&#8217;s <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> long-term investments.<\/p>\n<p>Working capital can also be classified according to time. Short-term working capital is the difference between current assets and current liabilities that is expected to be converted into cash within one year. Long-term working capital is the difference between current assets and current liabilities that is expected to be converted into cash after one year.<\/p>\n<p>Here is a brief explanation of each option:<\/p>\n<ul>\n<li>Option A: Financing method and time. This option is incorrect because working capital is not classified according to financing method. Financing method refers to the way in which a company raises funds, such as debt or equity. Working capital is a measure of a company&#8217;s liquidity, not its financing method.<\/li>\n<li>Option B: Rate of return and financing method. This option is incorrect because working capital is not classified according to rate of return. Rate of return refers to the amount of profit that a company makes on its investments. Working capital is a measure of a company&#8217;s liquidity, not its rate of return.<\/li>\n<li>Option C: Time and rate of return. This option is incorrect because working capital is not classified according to time or rate of return. Time refers to the length of time that it takes for a company to convert its assets into cash. Rate of return refers to the amount of profit that a company makes on its investments. Working capital is a measure of a company&#8217;s liquidity, not its time or rate of return.<\/li>\n<li>Option D: Components and time. This option is correct because working capital can be classified into two components: operating working capital and financial working capital. Operating working capital is the difference between current assets and current liabilities that is used to finance the company&#8217;s day-to-day operations. Financial working capital is the difference between current assets and current liabilities that is used to finance the company&#8217;s long-term investments. Working capital can also be classified according to time. Short-term working capital is the difference between current assets and current liabilities that is expected to be <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> converted into cash within one year. Long-term working capital is the difference between current assets and current liabilities that is expected to be converted into cash after one year.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Having defined working capital as current assets, it can be further classified according to __________.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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