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Which one of the following events does not have any impact on total working capital? A cash dividend to be paid next month is

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Answer #1

Which of the following events does not have any impact on total working capital.

Answer : Salaries previously accrued are paid

Explanation : Salaries previously accrued means the salaries were outstanding and outstanding salary is a current liability which here is paid by cash i.e. from current assets. So, in this transaction both current assets and current liability decreases and hence it does not have any impact on total working capital.

Question 12 :

Answer : Sale of plant asset at a gain

Explanation : Here, sale of plant will increase the cash balance and thus the current assets will increase and this will lead to increase in current ratio.

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