GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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If a particular current asset in the current year is more than what was in the previous year, then the change in the current assets results in of working capital.
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zero
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increase
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decrease
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none of these
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Explanation:
Detailed explanation-1: -When it comes to business finance, the terms “working capital” and “net working capital” are often used interchangeably. However, there is a big difference between the two concepts. Working capital is a measure of a company’s short-term liquidity, while net working capital is a measure of a company’s overall liquidity.
Detailed explanation-2: -Working Capital = Current Assets – Current Liabilities The working capital formula tells us the short-term liquid assets available after short-term liabilities have been paid off.
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