The portion of a firm's current assets financed with long-term funds may be called
A) working capital.
B) accounts receivable.
C) net working capital.
D) inventory.

Question

Quizplus · Accepted Answer

Net working capital is the difference between current assets and current liabilities. If a portion of current assets is financed with long-term funds, it still counts towards current assets but is not considered part of working capital. Therefore, the portion of current assets financed with long-term funds would be included in the calculation of net working capital.

The Portion of a Firm's Current Assets Financed with Long-Term