Which of the Following Will Cause an Increase in Net

question 5

Multiple Choice

Which of the following will cause an increase in net working capital, other things held constant?

• A) A cash dividend is declared and paid.
• B) Merchandise is sold at a profit, but the sale is on credit.
• C) Long-term bonds are retired with the proceeds of a preferred stock issue.
• D) Missing inventory is written off against retained earnings.
• E) Cash is used to buy marketable securities.

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Definitions:

Accounting Process

A systematic method of recording, summarizing, and reporting a company's financial transactions.

Financial Information

Data related to the financial status and operations of an entity, including assets, liabilities, revenue, and expenses.

Sole Proprietorships

Sole Proprietorships are businesses owned and operated by a single individual, with no legal distinction between the owner and the business.

Sarbanes-Oxley Act

A U.S. law enacted in 2002 to protect investors from fraudulent financial reporting by corporations.