Accounting for IGCSE & O level - Advanced Principles (Section 4 - No. 46)
What is the impact on working capital if a company pays off short-term liabilities with cash?
Working capital increases
Working capital decreases
Working capital remains the same
Cannot be determined
Paliwanag
Paying off short-term liabilities with cash reduces both current assets (cash) and current liabilities, leaving working capital unchanged.