Working Capital Is Equal to Current Assets Plus Current Liabilities

question 119

True/False

Working capital is equal to current assets plus current liabilities.

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Definitions:

Equity Account

An account that represents the owner's or shareholders' residual interest in the assets of a company after deducting liabilities.

Common Stock

This represents ownership shares in a corporation, providing voting rights and entitling the holder to a share of the company's success through dividends and capital appreciation.

Stockholder

An individual or entity that owns shares in a corporation, giving them ownership interest.

Dividends Account

An account used in bookkeeping that records the dividends paid out to shareholders from a corporation's earnings.