Smith Corporation Entered into the Following Transactions: • Purchased Inventory

question 115

Multiple Choice

Smith Corporation entered into the following transactions: • Purchased inventory on account.
• Collected an account receivable.
• Purchased equipment using cash.
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Which of the following statements about Smith's transactions is correct?

• A)The inventory purchase on account increased working capital.
• B)Collecting an account receivable increases working capital.
• C)The equipment purchase decreases working capital.
• D)The inventory purchase on account decreases working capital.

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