Other Things Held Constant,which of the Following Will Cause an Increase

question 13

Multiple Choice

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:

Insurance Expense

The cost incurred by an entity to obtain insurance coverage, recognized as an expense over the period the insurance provides coverage.

Post-Closing Trial Balance

A list of all accounts and their balances after closing entries are made, used to check the balance of debits and credits.

Fees Earned

Income received from providing services, typically recorded when the service is rendered, not when the payment is received.

Supplies Expense

Expenditures related to consumable supplies used in the operating activities of a business during a specific period.