Which of the Following Is True of Net Working Capital

question 113

Multiple Choice

Which of the following is true of net working capital?

• A) When current assets of a firm exceed its current liabilities,a firm is said to have negative net working capital.
• B) When current assets of a firm are less than its total assets,a firm is said to have positive net working capital.
• C) When current assets of a firm exceed its current liabilities,a firm is said to have positive net working capital.
• D) When current assets of a firm exceed its total assets,the firm is said to have negative net working capital.

---

Definitions:

Income Tax Return

The form or forms used to report income to a federal, state, or local tax authority and to calculate taxes owed.

Form W-3

The transmittal form used to submit information on total wages paid and taxes withheld from all employees' wages to the IRS, accompanying the W-2 forms.

Wage Income

Earnings received by an employee as a result of their employment, typically in the form of a salary or wages.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, representing the rate that applies to each additional dollar of income, important for financial planning and decision-making.