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 an increase 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 revenue and the collection of cash for future services.

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 an increase 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 revenue and the collection of cash for future services.

Quizplus · Accepted Answer

The accrual of revenue increases accounts receivable which increases current assets and increases working capital.

SRJ Corporation Entered into the Following Transactions