Keller Company paid its sales employees $1,200 in sales commissions. What impact will this transaction have on working capital?
A)Increase it
B)Decrease it
C)No impact
D)Not enough information is provided to answer the question.

Question

Quizplus · Accepted Answer

The formula for working capital is: current assets - current liabilities. This transaction will increase expenses and decrease cash. Current assets will go down which will result in a decrease in working capital.

Keller Company Paid Its Sales Employees $1,200 in Sales Commissions