{"id":24785,"date":"2024-04-15T06:51:20","date_gmt":"2024-04-15T06:51:20","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=24785"},"modified":"2024-04-15T06:51:20","modified_gmt":"2024-04-15T06:51:20","slug":"working-capital-means-_________-a-current-asset-plus-current-liability-b-current-asset-minus-current-liability-c-fixed-asset-plus-current-asset-d-fixed-asset-minus-current-asset","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/working-capital-means-_________-a-current-asset-plus-current-liability-b-current-asset-minus-current-liability-c-fixed-asset-plus-current-asset-d-fixed-asset-minus-current-asset\/","title":{"rendered":"Working capital means _________. A. Current asset plus current liability B. Current asset minus current liability C. Fixed asset plus current asset D. Fixed asset minus current asset"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9e7f0d7b72c\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"true\">\r\n                    Current asset plus current liability                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    Current asset minus current liability                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    Fixed asset plus current asset                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    Fixed asset minus current asset                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is A. Current asset plus current liability.<\/p>\n<p>Working capital is a measure of a company&#8217;s liquidity and efficiency. It is calculated by taking the current assets of a company and subtracting its 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 debt.<\/p>\n<p>A positive working capital indicates that a company has more current assets than current liabilities. This means that the company has enough cash and other liquid assets to cover its short-term debts. A negative working capital indicates that a company has more current liabilities than current assets. This means that the company may have difficulty meeting its short-term obligations.<\/p>\n<p>There are a number of things that companies can do to improve their working capital. One way is to increase their current assets. This can be done by increasing sales, collecting receivables more quickly, or reducing inventory levels. Another way to improve working capital is to decrease current liabilities. This can be done by negotiating longer payment terms with suppliers, delaying payments to employees, or issuing long-term debt.<\/p>\n<p>Working capital is an important measure of a company&#8217;s financial health. A positive working capital indicates that a company is in good financial condition and is able to meet its short-term obligations. A negative working capital, on the other hand, indicates that a company may have difficulty meeting its short-term obligations and may be in financial trouble.<\/p>\n<p>Here is a brief explanation of each option:<\/p>\n<ul>\n<li>Option A: Current asset plus current liability. This is the correct answer. Working capital is calculated by taking the current assets of a company and subtracting its current liabilities.<\/li>\n<li>Option B: Current asset minus current liability. This is not the correct answer. Working capital is calculated by taking the current assets of a company and adding its current liabilities.<\/li>\n<li>Option C: Fixed asset plus current asset. This is not the correct answer. Fixed assets are assets that are not expected to be converted into cash within one year. Current assets are assets that are expected to be converted into cash within one year.<\/li>\n<li>Option D: Fixed asset minus current asset. This is not the correct answer. Fixed assets are assets that are not expected to be converted into cash within <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n           <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div>  Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> one year. Current assets are assets that are expected to be converted into cash within one year.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[695],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Working capital means _________. A. Current asset plus current liability B. Current asset minus current liability C. Fixed asset plus current asset D. 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