SRJ Corporation entered into the following transactions:
The accrual of interest expense on a six-month note payable.
Collected cash for services to be provided within the next six months.
The accrual of revenue.
Which of the above transactions resulted in a decrease in working capital?
A)The accrual of interest expense.
B)Collecting cash for services to be provided in the future.
C)The accrual of revenue.
D)Both the accrual of interest expense and the accrual of revenue.

Question

SRJ Corporation entered into the following transactions:
 The accrual of interest expense on a six-month note payable.
 Collected cash for services to be provided within the next six months.
The accrual of revenue.
Which of the above transactions resulted in a decrease in working capital?
A)The accrual of interest expense.
B)Collecting cash for services to be provided in the future.
C)The accrual of revenue.
D)Both the accrual of interest expense and the accrual of revenue.

Quizplus · Accepted Answer

The interest accrual increases interest payable, which increases current liabilities and decreases working capital.

SRJ Corporation Entered into the Following Transactions