[amp_mcq option1=”Goodwill” option2=”Working capital” option3=”Net income” option4=”Capital” correct=”option4″]
The correct answer is D. Capital.
Assets are the things that a company owns, such as cash, inventory, and equipment. Liabilities are the things that a company owes, such as loans and accounts payable. Capital is the difference between assets and liabilities. It is the amount of money that a company has invested in its business.
Goodwill is an intangible asset that arises when a company acquires another company for more than the fair value of its net assets. Working capital is the difference between current assets and current liabilities. Net income is a company’s profit or loss for a period of time, usually a quarter or a year.
Here is a more detailed explanation of each option:
- Goodwill is an intangible asset that arises when a company acquires another company for more than the fair value of its net assets. Goodwill is recorded on the balance sheet as an asset and is amortized over a period of time.
- Working capital is the difference between current assets and current liabilities. Current assets are assets that are expected to be converted into cash within one year, such as cash, accounts receivable, and inventory. Current liabilities are liabilities that are due within one year, such as accounts payable and short-term loans.
- Net income is a company’s profit or loss for a period of time, usually a quarter or a year. Net income is calculated by taking the company’s revenue and subtracting its expenses.
- Capital is the difference between assets and liabilities. It is the amount of money that a company has invested in its business. Capital is used to finance the company’s operations and to purchase assets.