What is an example of the proper use of capital in a business?
Answer and explanation
Correct answer: Investing money thoughtfully in necessary expenses
Capital is a limited business resource, so it should be directed towards productive and necessary purposes, such as purchasing materials, paying essential expenses, or improving operations. Thoughtful investment supports continuity and growth. Spending on show, lending without records, or ignoring expenses can create waste, losses, and cash-flow problems.
Frequently asked questions
What is the correct answer to this question?
Investing money thoughtfully in necessary expenses
Why is this the correct answer?
Capital is a limited business resource, so it should be directed towards productive and necessary purposes, such as purchasing materials, paying essential expenses, or improving operations. Thoughtful investment supports continuity and growth. Spending on show, lending without records, or ignoring expenses can create waste, losses, and cash-flow problems.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Sources of Business Finance. Topic: Concept, nature and importance of business finance.
