During the year, Mason Company’s current assets increased by $120,000, current liabilities decreased by $50,000, and net working capital
Accounting MCQs | Accounting MCQs

During the year, Mason Company’s current assets increased by $120,000, current liabilities decreased by $50,000, and net working capital

Increased by $70,000.
Did not change.
Decreased by $170,000.
Increased by $170,000.Show Result

Correct - Your answer is correct.

Wrong - Your answer is wrong.

Detailed Answer

Answer (D) is correct. Net working capital is the excess of current assets over current liabilities. An increase in current assets or a decrease in current liabilities increases working capital. Thus, net working capital increased by $170,000 ($120,000 + $50,000 .