A Firm Starts Its Year with Positive Net Working Capital

question 82

Multiple Choice

A firm starts its year with positive net working capital.During the year,the firm acquires more short-term debt than it does short-term assets.This means that:

• A)the ending net working capital must be negative.
• B)both accounts receivable and inventory decreased during the year.
• C)the beginning current assets were less than the beginning current liabilities.
• D)accounts payable increased and inventory decreased during the year.
• E)the ending net working capital can be positive,negative,or equal to zero.

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Definitions:

Direct Evidence

Evidence that directly proves a fact without needing any inference or presumption, such as eyewitness testimony.

Hearsay

Evidence based on the reports of others rather than on personal knowledge, which is not admissible in court under most circumstances.

Direct Evidence

Evidence that directly proves a fact without the need for any inference or presumption.

Circumstantial Evidence

Evidence that relies on an inference to connect it to a conclusion of fact, unlike direct evidence that directly proves a fact.