Funds used for paying wages, salaries and payments for raw materials are categorized under
Answer Details
The funds used for paying wages, salaries, and payments for raw materials are categorized under "circulating capital."
Circulating capital refers to the capital or funds that are invested in a business for a short period of time, usually less than one year, to support its day-to-day operations. These funds are used to purchase raw materials, pay for labor and other operating expenses, and keep the business running smoothly.
Unlike fixed capital, which is invested in long-term assets such as land, buildings, and machinery, circulating capital is constantly flowing or circulating through the business as it is used and then replenished.
Nominal capital refers to the total face value of a company's authorized shares of stock, and is not related to the funds used for day-to-day operations. Liquid capital, on the other hand, refers to assets that can be quickly and easily converted into cash, such as stocks and bonds, but is also not directly related to operating expenses.