An increase in accounts payable and in inventory suggests that net working capital also increased.

Name: An increase in accounts payable and in inventory suggests that net working capital also increased.
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Question

An increase in accounts payable and in inventory suggests that net working capital also increased.​

Quizplus · Accepted Answer

An increase in accounts payable (a liability) would decrease net working capital, while an increase in inventory (an asset) would increase it. The net effect on net working capital depends on the relative sizes of these changes.

An Increase in Accounts Payable and in Inventory Suggests That