Working capital is defined as
A)the difference between paid-in capital and retained earnings.
B)the difference between current assets and current liabilities.
C)the difference between cash and retained earnings.
D)the difference between sales and cost of goods sold.
E)the difference between total assets and total liabilities.

Question

Quizplus · Accepted Answer

Working capital is the difference between a company's current assets (such as inventory, accounts receivable, and cash) and its current liabilities (such as accounts payable and short-term debt). It represents the amount of funds a company has available for its day-to-day operations. Choices A, C, D, and E do not accurately reflect the definition of working capital.

Working Capital Is Defined as