Which of the following statements regarding working capital is not true?
A) Current assets represent the working capital of the company.
B) Current assets less current liabilities are equal to net working capital.
C) Working capital is the sum of the book values of all physical, long-lived assets.
D) Working capital is the assets that are used in the day-to-day operation of the business.

Question

Quizplus · Accepted Answer

Working capital is defined as current assets minus current liabilities, not the sum of the book values of all physical, long-lived assets. Long-lived assets are considered non-current assets and are not included in the calculation of working capital.

Which of the Following Statements Regarding Working Capital Is Not