Company a Has Total Current Liabilities Equal to $500,000,and Working

question 178

Multiple Choice

Company A has total current liabilities equal to $500,000,and working capital of $20,000.Company B has the same amount of working capital,but it has total current liabilities of $30,000.The company with the better working capital position is:

• A) They both have exactly the same working capital position.
• B) Company A
• C) Company B
• D) no comparison is possible

---

Definitions:

Equality Of Income

A state in which income is distributed equally among individuals or groups in society.

Incentive To Produce

Factors or motivations that encourage firms or individuals to engage in production, often driven by the potential for profit or market demand.

Before-Tax Total Income

The total income earned by an individual or a business before any taxes are deducted.

Poorest 20 Percent

The segment of a population that ranks at the bottom fifth in terms of income.