Which of the following account changes would reduce a firm's net working capital if all other account balances are held constant?
A)Increase in inventories
B)Increase in accounts payable
C)Decrease in accounts receivable
D)b and c
E)None of the above

Question

Quizplus · Accepted Answer

Net working capital is calculated as current assets minus current liabilities. An increase in accounts payable (a liability) or a decrease in accounts receivable (an asset) would reduce net working capital.

Which of the Following Account Changes Would Reduce a Firm's