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Assertion (A): The management of working capital refers to the management of current assets and current liabilities.
Reason (R): The major thrust is on the managementof current assets; because current liabilities arise in the context of current assets.

Assertion (A): The management of working capital refers to the management of current assets and current liabilities.
Reason (R): The major thrust is on the managementof current assets; because current liabilities arise in the context of current assets. Correct Answer Both (A) and (R) are correct

Related Questions

Which of the following rules stands true while preparing a schedule of changes in working capital? (A) An increase in current assets increases working capital (B) An increase in current assets decreases working capital (C) An increase in current liabilities decreases working capital (D) An increase in current liabilities increases working capital Choose the most appropriate answer from the options given below:
Which one of the following combination of rules stands true while preparing schedule of changes in working capital?
1. An increase in current assets increases working capital.
2. An increase in current assets decreases working capital.
3. An increase in current liabilities decreases working capital.
4. An increase in current liabilities increases working capital.
Read the following statements:
1. The rate of return on investment increases with the shortage of working capital.
2. Net working capital is the excess of current assets over current liabilities.
3. Greater the size of the business unit, larger will be the requirement of working capital.
4. Working capital is also known as circulating capital.
Which one of the following consists of the correct statements?
Consider the following statements in connection with thrust bearings: 1) Cylindrical thrust bearings have higher coefficient of friction than ball thrust bearings. 2) Taper rollers cannot be employed for thrust bearings. 3) Double-row thrust ball bearing is not possible 4) Lower race, outer race and retainer are readily separable in thrust bearings. Which of the above statements are correct?
Consider the following data relating to a farm
Total assets = Rs. 3000
Working assets = Rs. 800
Current assets = Rs. 1500
Current liabilities = Rs. 200
Total liabilities = Rs. 900
The net capital ratio in this case would be
An assertion and a reason are given below. Assertion: The phenomenon of nuclear fission generates great energy. Reason: The process in which a nucleus is broken into two parts is called nuclear fission. Choose the answer. A. Both Assertion and Reason are true and Reason is the correct explanation of Assertion. B. Both Assertion and Reason are true but Reason is not the correct explanation of Assertion. C. Both Assertion and Reason are false. D. Assertion is true but Reason is false.
Rocket A has twice the pressure thrust of rocket B while it has half the momentum thrust as that of B. If the momentum thrust of B is 5 times its pressure thrust, find the ratio of total thrust of A to B.
A, B, C, D, K, L, M and O are researchers and are working in three different institutes, X, Y and Z. They are working in three different areas namely, solar energy, sustainable development, and rainwater harvesting for agricultural purpose. Not less than two or more than three researchers are working in the same area and not more than three of them are working the same institute. K is researching in the sustainable development in the institute Y with B who is doing research in rainwater harvesting. A and M are doing research in the same area but not in sustainable development and are not working in the institute Y. C is researching in solar energy in the institute Z, only with D who is working in sustainable development. L is researching in rainwater harvesting area and not working in the institute where A works. O is not doing research in the solar energy. Choose option for answering question, In which of the institute/institutes at least one researcher is working in the area of solar energy ?
Consider the following pairings of Non-Performing Assets (NPA) classification in India with their descriptions: 1. Substandard assets : Assets which have remained NPAs for a period less than or equal to 12 months. 2. Doubtful assets : Assets which have remained in the substandard category for a period of 12 months. 3. Loss assets : Assets which are considered uncollectible and of such little value that their continuance as a bankable asset is not warranted, although there may be some salvage or recovery value. Which out of the above pairings are correct?
Direction-The question have two statements.
One is labelled as Assertion (A) and the other as Reason (R). You have to examine both the statements carefully and decide whether Assertion (A) and Reason (R) separately are true and if so then reason is the correct explanation of the assertion. Mark these items on the answer sheet.
Assertion (A): Interest payable on working capital should be treated as an item of operating expenses.
Reason (R): Interest is the cost of capital used in the business.