Which one of the following events does not have any impact on total working capital?
A)A cash dividend to be paid next month is declared.
B)Warranty expense is accrued.
C)Salaries previously accrued are paid.
D)Debt which was previously long-term matures next year.

Question

Quizplus · Accepted Answer

Paying off previously accrued salaries impacts the cash and current liabilities equally, thus having no net effect on total working capital. Total working capital is calculated as current assets minus current liabilities, and since both the asset (cash) and the liability (accrued salaries) decrease by the same amount, the total working capital remains unchanged.

Which One of the Following Events Does Not Have Any