Net Working Capital Is Calculated by Taking the Difference Between

question 100

Multiple Choice

Net working capital is calculated by taking the difference between:

• A) total assets and total liabilities.
• B) inventory and accounts payable.
• C) current assets and current liabilities.
• D) cash and accounts payable.

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Definitions:

Activity Base

A measure used in costing that is a significant and quantifiable activity or event, determining the cost incurred by an activity.

Level Of Activity

A measure of the volume of production or work that a business operates at, which can affect costs and efficiency.

Variable Costs

Expenses that vary directly with the amount of production or the degree of business operations.

Fixed Costs

Expenses that do not change with the level of production or sales over a certain period, such as rent or salaries.