Which One of These Will Decrease Net Working Capital

question 4

Multiple Choice

Which one of these will decrease net working capital?

• A) Cash sale of inventory at a loss
• B) Receipt of a cash payment on account from a customer
• C) Cash payment of an account payable
• D)Cash sale of inventory at cost

---

Definitions:

Fixed Cost

Expenses that do not change in total despite fluctuations in production or sales volume.

Mixed Cost

A cost consisting of both fixed and variable components and which is thus partially affected by changes in the level of activity.

Charitable Contribution

Monetary or in-kind donations given to charitable organizations, often eligible for tax deductions.

Sunk Cost

Expenses that were previously incurred and cannot be reclaimed.