Net Operating Working Capital Is Equal to Current Assets Minus

question 94

True/False

Net operating working capital is equal to current assets minus the difference between current liabilities and notes payable.

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Definitions:

Purchase Discount

A reduction in the price paid for goods or services if payment is made within a specified time frame.

Early Payment

A financial transaction where a debt or obligation is settled before its due date.

Credit Period

The duration of time the buyer is given to pay for a purchase after the goods are delivered or the services are provided.

Discount Period

The time frame during which a buyer can pay less than the full invoice amount due to early payment incentives.