Which one of the following would increase the working capital of a company?
A) Cash payment of payroll taxes payable.
B) Refinancing a short-term note payable with a two year note payable.
C) Cash collection of accounts receivable.
D) Payment of a 20-year mortgage payable with cash.

Question

Quizplus · Accepted Answer

Refinancing a short-term note payable with a two-year note payable increases working capital by converting a current liability into a long-term liability, thus reducing current liabilities and increasing working capital.

Which One of the Following Would Increase the Working Capital