Working Capital Increases When ____ Decreases

question 46

Multiple Choice

Working capital increases when ____ decreases.

• A) accounts receivable
• B) inventory
• C) accounts payable
• D) cash

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Definitions:

Gross Sales

The total sales revenue of a company without any deductions for returns, allowances, or discounts.

Cost Of Goods Sold

The immediate costs associated with manufacturing the products a company markets, including materials and workforce expenses.

Operating Cycle

The time period it takes for a company to purchase inventory, sell products, and receive cash from sales.

Merchandising Company

A business that purchases goods and resells them at a higher price, typically without modification to the products.