Accounting for IGCSE & O level - Final Statements (Section 3 - No. 9)
What would be the effect on a company's working capital if it uses cash to pay off accounts payable?
Working capital decreases
Working capital increases
Working capital remains the same
Working capital turns negative
Explanation
Both current assets (cash) and current liabilities (accounts payable) decrease by the same amount, leaving working capital unchanged.
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