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  • Ramnath is into the business of assembling and selling of televisions. Recently he has adopted a new policy of purchasing the components on three months credit and selling the complete product in cash. Will it affect the requirement of working capital? Give reason in support of your answer.

Ramnath is into the business of assembli | Class 12 Business Studies Chapter Financial Management, Financial Management NCERT Solutions

Q5.

Ramnath is into the business of assembling and selling of televisions. Recently he has adopted a new policy of purchasing the components on three months credit and selling the complete product in cash. Will it affect the requirement of working capital? Give reason in support of your answer.

Working capital means the capital invested in current or working assets such as stock of materials and finished goods, accounts receivable, bills receivable, short-term securities and cash or bank balance for meeting day-to-day expenses.

In the above case Ramnath purchasing the components on three month credit and selling the product in cash. In this situation the requirement of working capital will be reduced to the extent of credit he availed.

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NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:

  • Read the question carefully and focus on the core concept being asked.
  • Reference examples and data from the chapter when answering questions about Financial Management.
  • Review previous year question papers to get an idea of how such questions may be framed in exams.
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Important Questions & Answers

What is the correct answer to: Ramnath is into the business of assembling and selling of televisions. Recently he has adopted a new policy of purchasing the components on three months credit and selling the complete product in cash. Will it affect the requirement of working capital? Give reason in support of your answer.?

Working capital means the capital invested in current or working assets such as stock of materials and finished goods, accounts receivable, bills receivable, short-term securities and cash or bank balance for meeting day...

How do you solve Ramnath is into the business of assembling and selling of televisions. Recently he has adopted a new policy of purchasing the components on three months credit and selling the complete product in cash. Will it affect the requirement of working capital? Give reason in support of your answer. step by step?

Step-by-step explanation:
• Working capital means the capital invested in current or working assets such as stock of materials and finished goods, accounts receivable, bills receivable, short-term securities and cash or bank balance for meeting day-to-day expenses


• In the above case Ramnath purchasing the components on three month credit and selling the product in cash
• In this situation the requirement of working capital will be reduced to the extent of credit he availed

Why is this answer important for exams?

This question is important because it tests key concepts from the NCERT syllabus and is frequently asked in CBSE exams.

Which NCERT concept is used in this question?

This question is based on core NCERT concepts explained in the chapter and should be revised thoroughly before exams.

What common mistakes should be avoided in this question?

Students often lose marks by skipping steps, writing incomplete explanations, or misunderstanding keywords used in the question.

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