A company that receives a customer's payment of $2,500 for a previous sale will see no change in its net working capital.

Question

Quizplus · Accepted Answer

Net working capital is the difference between a company's current assets and current liabilities. If a customer pays $2,500 for a previous sale, it would increase the company's cash (current asset) and decrease accounts receivable (another current asset). This would result in no change in the net working capital because the increase in cash would be offset by the decrease in accounts receivable.

A Company That Receives a Customer's Payment of $2,500 for a Previous