Working Capital Management EXAM
QUESTIONS AND ANSWERS 100%
SOLVED (Newest 2025)
Classify the funds allocated to a concern - Correct Answers
✅*1. LT*
a. Fixed investment
b. A major part is invested in the fixed assets
c. A major part = invested in the fixed assets
*2. ST*
a. Used to run day-to-day operations
What are the two concepts of working capital? - Correct
Answers ✅1. *Quantitative working capital*
a. AKA *Gross concept*
2. *Qualitative working capital*
a. *AKA Net concept*
What is the Quantitative concept? - Correct Answers ✅a.
AKA *Gross concept*
b. The amount of working capital refers to the 'total of current
assets' ≈ Circulating capital
,Working Capital Management EXAM
QUESTIONS AND ANSWERS 100%
SOLVED (Newest 2025)
What is the qualitative concept? - Correct Answers ✅a.
*AKA Net concept*
b. Gives an idea regarding the source of financing capital
3. Working capital = *the excess of current assets over
current liabilities*
What is the working capital according to the qualitative
concept? - Correct Answers ✅The excess of current assets
over current liabilities
What is the working capital according to the quantitative
concept? - Correct Answers ✅The total of current assets
L. J. Guthmann defined working capital as... - Correct
Answers ✅The portion of a firm's current assets = financed
from LT funds
Net-working capital - Correct Answers ✅Current assets
-
Current liabilities
, Working Capital Management EXAM
QUESTIONS AND ANSWERS 100%
SOLVED (Newest 2025)
What does *the net-working capital represent*? - Correct
Answers ✅1. The amount of current assets = remain if all
current liabilities = paid
When is the *Gross concept* used? - Correct Answers
✅Objective =
*To measure the size + extent to which current assets =
being used*
When is the *Net concept* used? - Correct Answers ✅*To
evaluate the liquidity position of an undertaking*
Define *Current assets* - Correct Answers ✅1. Short life
span
2. Engaged in the current operation of a business
3. Used for ST operations: < 12 months
4. *Important characteristics*:
a. *Short life span*
b. *Swift transformation* into other forms of assets
QUESTIONS AND ANSWERS 100%
SOLVED (Newest 2025)
Classify the funds allocated to a concern - Correct Answers
✅*1. LT*
a. Fixed investment
b. A major part is invested in the fixed assets
c. A major part = invested in the fixed assets
*2. ST*
a. Used to run day-to-day operations
What are the two concepts of working capital? - Correct
Answers ✅1. *Quantitative working capital*
a. AKA *Gross concept*
2. *Qualitative working capital*
a. *AKA Net concept*
What is the Quantitative concept? - Correct Answers ✅a.
AKA *Gross concept*
b. The amount of working capital refers to the 'total of current
assets' ≈ Circulating capital
,Working Capital Management EXAM
QUESTIONS AND ANSWERS 100%
SOLVED (Newest 2025)
What is the qualitative concept? - Correct Answers ✅a.
*AKA Net concept*
b. Gives an idea regarding the source of financing capital
3. Working capital = *the excess of current assets over
current liabilities*
What is the working capital according to the qualitative
concept? - Correct Answers ✅The excess of current assets
over current liabilities
What is the working capital according to the quantitative
concept? - Correct Answers ✅The total of current assets
L. J. Guthmann defined working capital as... - Correct
Answers ✅The portion of a firm's current assets = financed
from LT funds
Net-working capital - Correct Answers ✅Current assets
-
Current liabilities
, Working Capital Management EXAM
QUESTIONS AND ANSWERS 100%
SOLVED (Newest 2025)
What does *the net-working capital represent*? - Correct
Answers ✅1. The amount of current assets = remain if all
current liabilities = paid
When is the *Gross concept* used? - Correct Answers
✅Objective =
*To measure the size + extent to which current assets =
being used*
When is the *Net concept* used? - Correct Answers ✅*To
evaluate the liquidity position of an undertaking*
Define *Current assets* - Correct Answers ✅1. Short life
span
2. Engaged in the current operation of a business
3. Used for ST operations: < 12 months
4. *Important characteristics*:
a. *Short life span*
b. *Swift transformation* into other forms of assets
