The fixed and current assets of a business are called
The fixed and current assets of a business are called
- A) Called - up capital
- B) Capital employed
- C) Paid - up capital
- D) Authorized capital
Correct Answer: B) Capital employed
Explanation
The question is asking about the names given to the fixed and current assets of a business.Fixed assets are the long-term assets that a business owns, such as buildings, land, machinery, and vehicles. These assets are not easily converted into cash and are used by the business for its operations over a long period of time.
Current assets, on the other hand, are the short-term assets that a business owns and can be easily converted into cash within a year. Examples of current assets include cash, inventory, accounts receivable, and prepaid expenses.
The correct answer to the question is Option B: Capital employed. Capital employed refers to the total amount of money invested in a business, including both fixed and current assets. It represents the total value of assets that are being used to generate income for the business.
Option A: Called-up capital refers to the portion of a company's share capital that has been paid by the shareholders.
Option C: Paid-up capital refers to the portion of a company's share capital that has been actually paid by the shareholders.
Option D: Authorized capital refers to the maximum amount of share capital that a company is allowed to issue according to its constitution.
In summary, the fixed and current assets of a business are referred to as capital employed. This represents the total value of assets that are being used to generate income for the business.