Which One of the Following Statements Concerning Net Working Capital

question 66

Multiple Choice

Which one of the following statements concerning net working capital is correct?

• A)Net working capital increases when inventory is purchased with cash.
• B)Net working capital must be a positive value.
• C)Total assets must increase if net working capital increases.
• D)A decrease in the cash balance may or may not decrease net working capital.
• E)Net working capital is the amount of cash a firm currently has available for spending.

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Definitions:

ENT

Ear, Nose, and Throat, a branch of medicine focused on the diagnosis and treatment of disorders of these areas.

Abbreviation

A shortened form of a word or phrase, used to save space or avoid repetition.

Kilogram

A unit of mass equal to 1,000 grams, used in the metric system.

Gram

A metric unit of mass equal to one-thousandth of a kilogram, also used in microbiology as a staining method to classify bacteria.