Other things held constant,which of the following will cause an increase in net working capital?
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.

Question

Quizplus · Accepted Answer

When merchandise is sold on credit, accounts receivable increase, which increases current assets and therefore net working capital.

Other Things Held Constant,which of the Following Will Cause an Increase