Which term refers to the funds necessary to carry out business activities?

The term that refers to the funds necessary to carry out business activities is capital. Capital represents the financial resources that a business uses to create goods or services and support its operations. It encompasses not just the money in the bank but also other forms of funding that can be utilized for various business activities, including starting new projects, maintaining daily operations, and ensuring sufficient working capital to meet obligations. Understanding capital is crucial for any entrepreneur as it lays the foundation for all business operations and investments.

On the other hand, while financing refers to the methods through which businesses acquire capital, it does not directly define the funds themselves. Similarly, investment pertains to the allocation of capital into productive assets or opportunities with the expectation of generating profit, and assets are resources owned by a business, which may have been acquired through capital but do not themselves refer specifically to the funds used to conduct business activities.