Accounting for IGCSE & O level - Final Statements (Section 14 - No. 36)
What transactions would increase working capital?
Cash collected from customers.
Purchasing inventory on credit.
Taking out a short-term loan.
Paying off a long-term loan.
ব্যাখ্যা
Working capital is Current Assets - Current Liabilities. Collecting cash from customers increases cash (a current asset) therefore increases working capital. Obtaining a short-term loan increases cash(a current asset) and a liability which may or may not be a current liability dependent on the term of the loan. In this situation, a short-term loan increases working capital.