A Project That Increased Sales Was Accompanied by a $50,000

question 83

Multiple Choice

A project that increased sales was accompanied by a $50,000 increase in inventory,a $20,000 increase in accounts receivable,and a $25,000 increase in accounts payable.Assuming these amounts remain constant,by how much has net working capital increased?

• A) $5,000
• B) $25,000
• C) $30,000
• D) $45,000

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Definitions:

Financial Statements

Records that outline the financial activities and condition of a business, government, or individual. These commonly include the balance sheet, income statement, and statement of cash flows.

Certificates of Deposit

Fixed-term financial instruments issued by banks that pay interest until maturity, when they can be redeemed for the original amount plus accrued interest.

Petty Cash

A small amount of cash on hand used for covering minor expenses in a business.

Current Asset

A current asset is an asset that is expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.