Other things held constant, which of the following will cause an increase in net working capital?
A. Cash is used to buy marketable securities.
B. A cash dividend is declared and paid.
C. Merchandise is sold at a profit, but the sale is on credit.
D. Long-term bonds are retired with the proceeds of a preferred stock issue.
E. Missing inventory is written off against retained earnings.
Answer: C
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According to the Uniform Commercial Code Section 2-207, which of the following is true with regard to non-merchants dealing with the sale of goods?
A) A counteroffer by the offeree does not constitute a rejection, and the additional term added by the offeree will automatically become part of the contract. B) A counteroffer by the offeree does not constitute a rejection, but the additional term added by the offeree will not become part of the contract. C) A counteroffer terminates the negotiation and triggers the terms of the Restatement of the Law of Contracts. D) A counteroffer constitutes a rejection of the original offer, but the parties may continue to negotiate the contract terms.
Allison Engines Corporation has established a target capital structure of 40 percent debt and 60 percent common equity. The firm expects to earn $150,000 in after-tax income during the coming year, and it will retain 30 percent of those earnings. What is the break point of retained earnings?
A. $175,000 B. $75,000 C. $112,500 D. $500,000 E. $250,000
Which of the following would be classified as a prevention cost on a quality cost report?
A. Quality improvement projects. B. Debugging software errors. C. Lost sales arising from a reputation for poor quality. D. Supplies used in testing and inspection.
Which of the following statements comparing traditional and Roth IRAs is false?
A. For a 57-year old individual, the maximum allowable contribution to either type of IRA is $7,000. B. Contributions to traditional IRAs may be deductible; contributions to Roth IRAs are nondeductible. C. Individuals may have to pay a premature withdrawal penalty from either type of IRA. D. Individuals who have reached age 70½ must begin liquidating either type of IRA.