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    jmgaravaglia's Avatar
    jmgaravaglia Posts: 1, Reputation: 1
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    #1

    Nov 19, 2010, 12:48 PM
    True or false?
    The payment of a current liability will affect the amount of working capital because cash decreases.
    Just Looking's Avatar
    Just Looking Posts: 1,610, Reputation: 480
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    #2

    Nov 19, 2010, 12:59 PM

    Working capital = current assets - current liabilities

    A payment of a current liability decreases current assets due to cash, but it also decreases current liabilities. Working capital stays the same.
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