Working Capital Is

question 48

Multiple Choice

Working capital is

• A) the difference between total assets and current liabilities.
• B) the excess of current assets over current liabilities.
• C) the difference between current assets and total liabilities.
• D) the excess of total assets over total liabilities.

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Definitions:

Balance Sheet

A financial statement that presents a company's financial position at a specific point in time, including assets, liabilities, and equity.

Ledger

A comprehensive collection of all accounts used by an organization, showing the changes made to each account due to transactions, and the current balance.

Journal

An accounting record where all transactions are initially recorded using the double-entry bookkeeping system before they are transferred to accounts in the general ledger.

Debt Ratio

A financial ratio that measures the extent of a company’s leverage, calculated by dividing total liabilities by total assets.