Net Working Capital Is Defined As

question 40

Multiple Choice

Net working capital is defined as:

• A) current assets plus fixed assets.
• B) current assets plus stockholders' equity.
• C) fixed assets minus long-term liabilities.
• D) total assets minus total liabilities.
• E) current assets minus current liabilities.

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Definitions:

Payroll Taxes

Financial obligations required from both employers and employees, usually based on a percentage of the compensation that employers distribute to their staff.

Rent Expense

The cost incurred by a company or individual for using a property or equipment owned by someone else.

Time Period Assumption

An accounting principle that allows the business operations to be divided into specific time periods for reporting purposes.

Revenue Recognition Principle

An accounting principle that dictates under what conditions revenue is recognized and determines when revenue is earned and recorded.