Which One of the Following Will Increase Net Working Capital

question 55

Multiple Choice

Which one of the following will increase net working capital? Assume the current ratio is greater than 1.0.

• A)paying a supplier for a previous purchase
• B)paying off a long-term debt
• C)selling inventory at cost
• D)purchasing inventory on credit
• E)selling inventory at a profit on credit

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Definitions:

Transitivity

In logic and mathematics, a property of relations that states if relation A exists between B and C, and relation A also exists between C and D, then A must exist between B and D as well.

Decentration

A cognitive ability to consider multiple aspects of a situation rather than focusing on just one.

Conservation

The principle that physical properties of objects, such as volume and mass, remain constant despite changes in their form or appearance.

Seriation

The cognitive ability to organize objects or items in a logical order, such as by size, number, or volume, essential in early childhood development.