Looking for the answer to the question below related to Working Capital ?
Other things held constant, which of the following will cause an increase in net working capital?
Options:
- a. Cash is used to buy marketable securities.
- b. A cash dividend is declared and paid.
- c. Merchandise is sold at a profit, but the sale is on credit.
- d. Long-term bonds are retired with the proceeds of a preferred stock issue.
- e. Missing inventory is written off against retained earnings.
The Correct Answer Is:
- Merchandise is sold at a profit, but the sale is on credit.
Conclusion
I hope you got the answer to your question.
