(16 Intro)

question 66

Multiple Choice

(16 Intro) . Other things held constant, which of the following will cause an increase in net working capital?

• A) Cash is used to buy marketable securities.
• B) A cash dividend is declared and paid.
• C) Merchandise is sold at a profit, but the sale is on credit.
• D) Long-term bonds are retired with the proceeds of a preferred stock issue.
• E) Missing inventory is written off against retained earnings.

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Definitions:

Net Sales

The total revenue from sales of goods and services, after deducting returns, allowances for damaged or missing goods, and any discounts allowed.

Net Accounts Receivable

The total amount of money owed to a company by its customers minus the portion expected to be uncollectible.

PCAOB

The Public Company Accounting Oversight Board, a nonprofit corporation established by Congress to oversee the audits of public companies, ensuring the accuracy and reliability of financial statements.

FASB

The Financial Accounting Standards Board, responsible for establishing accounting and financial reporting standards for companies and nonprofit organizations in the United States.