SRJ Corporation Entered into the Following Transactions: • the Accrual

question 105

Multiple Choice

SRJ Corporation entered into the following transactions: • The accrual of interest expense on a six-month note payable.
• Collected cash for services to be provided within the next six months.
• The reclassification of short-term debt to long-term debt.
Which of the transactions for SRJ Corporation resulted in a decrease in working capital?

• A)The accrual of interest expense.
• B)Collecting cash for services to be provided in the future.
• C)The reclassification of short-term debt to long-term debt.
• D)Both the accrual of interest expense and the reclassification of short-term debt to long-term debt.

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Definitions:

Depreciation

The process of allocating the cost of tangible assets over their useful lives, reflecting the decrease in their value over time.

Intangible Asset

An asset that lacks physical substance but is identifiable and provides economic benefits to the entity, such as patents, trademarks, and copyrights.

Fixed Asset

Long-term tangible property used in the operation of a business and not expected to be consumed or converted into cash in the near term.

Treasury Note

A medium-term government debt security with fixed interest rates and maturities typically between one and ten years.