Accounting for IGCSE & O level - Advanced Principles (Section 1 - No. 37)
Which of the following will reduce working capital?
Borrowing money from the bank.
Selling more share capital.
Purchasing inventory.
Paying off short-term debts.
Explanation
Purchasing inventory reduces working capital because it uses cash (a current asset) to increase inventory (another current asset), but it does not increase total current assets.