An example of an item which is NOT an element of working capital is:
A)Accrued interest on notes receivable.
B)Organization costs.
C)Goods in process.
D)Accounts Payable.

Question

Quizplus · Accepted Answer

Working capital is the amount of current assets minus current liabilities. Therefore, items such as accrued interest, goods in process, and accounts payable are all components of working capital. However, organization costs are not considered current assets or liabilities and hence, are not an element of working capital.

An Example of an Item Which Is NOT an Element