Which of the Following Will Cause an Increase in Net

question 62

Multiple Choice

Which of the following will cause an increase in net working capital, other things held constant?

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

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Definitions:

Posterior Pituitary

The rear portion of the pituitary gland, which releases hormones such as oxytocin and vasopressin into the bloodstream.

Sympathetic Nervous

Part of the autonomic nervous system that prepares the body for physical activity by accelerating the heart rate, constricting blood vessels, and raising blood pressure.

Releasing Hormones

Hormones secreted by the hypothalamus that trigger the release of other hormones from the anterior pituitary gland.

Anterior Pituitary

The front lobe of the pituitary gland, which secretes hormones that regulate growth, metabolism, and reproductive functions.