For Project Z, Year 5 Inventories Increase by $6,000; Accounts

question 58

Multiple Choice

For project Z, year 5 inventories increase by $6,000; accounts receivable by $4,000; and accounts payable by $3,000. Calculate the increase or decrease in working capital for year 5.

• A)Increases by $5,000
• B)Decreases by $1,000
• C)Increases by $7,000
• D)Decreases by $7,000

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Definitions:

U.S. Dollars

The currency of the United States, used as the standard unit of money for transactions within the country and internationally.

Translation Adjustment

An adjustment made in the process of converting the financial statements of a company into the currency of another country, reflecting changes in exchange rates.

Parent Company

A company that holds a controlling interest in another company, making the latter its subsidiary.

Financial Statements

Papers that offer a summary of a corporation's financial status, featuring the balance sheet, income statement, and cash flow statement.