Which of the following will cause an increase in net working capital, other things held constant?
A) A cash dividend is declared and paid.
B) Merchandise is sold at a profit, but the sale is on credit.
C) Long-term bonds are retired with the proceeds of a preferred stock issue.
D) Missing inventory is written off against retained earnings.
E) Cash is used to buy marketable securities.

Question

Quizplus · Accepted Answer

Selling merchandise on credit means that accounts receivable will increase, which is a current asset and will increase net working capital.

Which of the Following Will Cause an Increase in Net