Tribune Company purchases an inventory of paper for $1,000 on credit. All other working capital items remain the same. The change in net working capital that results from this transaction is:

A) $1,000.
B) $2,000.
C) zero.
D) $4,000.
E) $5,400.

Question

Shante Strydom · Accepted Answer

Final Answer : C, Explanation :  The change in net working capital is zero because the increase in inventory (an asset) is exactly offset by the increase in accounts payable (a liability), leaving net working capital unchanged.

Tribune Company purchases an inventory of paper for $1,000 on credit. All other working capital items remain the same. The change in net working capital that results from this transaction is:

A) $1,000.
B) $2,000.
C) zero.
D) $4,000.
E) $5,400.

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Tribune Company purchases an inventory of paper for $1,000 on credit. All other working capital items remain the same. The change in net working capital that results from this transaction is:A) $1,000.B) $2,000.C) zero.D) $4,000.E) $5,400.

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Learning Objectives

Learning Objectives

Related questions

Tribune Company purchases an inventory of paper for $1,000 on credit. All other working capital items remain the same. The change in net working capital that results from this transaction is:

A) $1,000.
B) $2,000.
C) zero.
D) $4,000.
E) $5,400.