SRJ Corporation Entered into the Following Transactions: • the Accrual

question 72

Multiple Choice

SRJ Corporation entered into the following transactions: • The accrual of interest expense on a six-month note payable.
• Collected cash for services to be provided within the next six months.
• The reclassification of short-term debt to long-term debt.
Which of the above transactions resulted in an increase in working capital?

• A) The accrual of interest expense.
• B) Collecting cash for services to be provided in the future.
• C)The reclassification of short-term debt to long-term debt.
• D)Both the reclassification of short-term debt to long-term debt and the collection of cash for future services.

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Definitions:

Shareholders

Individuals or entities that own one or more shares of stock in a joint-stock company, giving them a right to a portion of the company's profits and a vote in certain company matters.

Quo Warranto

A legal proceeding used to challenge an individual's right to hold a public or corporate office.

De Facto Corporation

A corporation in existence by operations and public dealings, despite not completing the formal requirements.

Corporate Entity

A legal entity that is separate and distinct from its owners, which can own assets, incur liabilities, and conduct business.