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Select the… (Class 12 Business Studies SQP 2026-27, Q12)

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Business StudiesCBSE Class 12 · Sample paper, session 2026-27 · 1 mark · MCQ

CBSE Class 12 Business Studies sample paper 2026-27: question 12

From the official CBSE sample question paper for 2026-27, section A, question 12, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q12 · 1 mark · MCQFinancial Management

Select the statement that does not correctly describe working capital.

  1. (A)It consists of funds invested in current assets of the business.
  2. (B)It helps in carrying out regular business activities smoothly.
  3. (C)It is calculated as the difference between current assets and current liabilities.
  4. (D)It is usually less liquid but contributes more to the profits than fixed assets.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2026-27.

Hints

Open one hint at a time and try again before the next.

Hint 1

Compare the liquidity of stock and cash with machinery.

Hint 2

Look for the statement that reverses the usual trade-off.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Working capital is the investment in current assets (or current assets minus current liabilities) and keeps day-to-day operations running.

  2. Current assets are more liquid and contribute less to profit than fixed assets, so statement (D) is the incorrect description. Option (D).

    1 mark

Answer: (D) It is usually less liquid but contributes more to the profits than fixed assets.

Where the marks are

  • Current assets: more liquid, less profitable (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Financial Management, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2026-27: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.