money spent for the day-to-day running of a business is called?

Assessment: WAEC SSCE - Commerce - 1990 (Objective) Subject: Commerce

Question 1 Report

money spent for the day-to-day running of a business is called?
Answer Details
Money spent for the day-to-day running of a business is called working capital. Working capital represents the funds that a business needs to maintain its daily operations, such as paying for raw materials, salaries, rent, utilities, and other expenses. Working capital is calculated by subtracting a business's current liabilities from its current assets. Current assets include cash, accounts receivable, and inventory, while current liabilities include accounts payable, short-term loans, and other debts that must be paid within one year. Having sufficient working capital is crucial for a business to maintain its operations and meet its financial obligations. A shortage of working capital can lead to difficulties in paying bills and suppliers, resulting in disruptions to the business's operations. Therefore, the correct answer is working capital.

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