Holding All Other Variables Constant, Which of the Following Would

question 34

Multiple Choice

Holding all other variables constant, which of the following would INCREASE net working capital for given year on a project?

• A) Allowing customers less time to pay for purchases
• B) Taking longer to pay suppliers
• C) Increasing inventory levels
• D) Both A and C

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Definitions:

Ending Inventory

Ending inventory refers to the total value of unsold goods that a company holds at the end of an accounting period.

Goods In Transit

Items that have been shipped by a seller but not yet received by the buyer, which can be included in the inventory of either party depending on the shipping terms.

Purchase Discount

is a reduction in the price of goods bought, usually due to early payment by the buyer to the seller.

Perpetual Inventory System

A perpetual inventory system continuously tracks inventory levels and costs, updating records with each receipt or sale of goods.