Question

principle for preparation of working capital statement - decrease in current assets
a) increases working capital
b) decreases working capital
c) decreases fixed capital
d) increase fixed capital​

Answer 1

Answer:

b is the correct ans

Explanation:

hope it is helpful

Answer 2

b) decreases working capital

EXPLANATION:

Working capital is calculated by subtracting current liabilities from the current assets shown on the company's balance sheet. Current assets include cash, accounts receivable, and inventories. Current liabilities include accounts payable, taxes, wages, and accrued interest.

Current assets are constantly declining. A company's cash balance fluctuates due to the inflow and outflow of operating cash and financial activities. A decrease in an asset is offset by either an increase in another asset, a decrease in a liability or capital account, or an increase in costs.

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