From the following choices, select the answer that describes the effect on working capital as a result of the transaction.
-Purchased inventory on account
A)Working capital will increase
B)Working capital will decrease
C)Working capital will not change

Question

Quizplus · Accepted Answer

Purchasing inventory on account increases inventory (an asset) and increases accounts payable (a liability) by the same amount, leaving working capital (current assets minus current liabilities) unchanged.

From the Following Choices, Select the Answer That Describes the Effect