Which of the following is NOT part of working capital?

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BlackTom AI · Accepted Answer

When assessing what constitutes working capital, we focus on current assets and current liabilities used to fund daily operations.
Option 1: accounts receivable. This is a current asset representing money owed to the company by customers, which is a typical component of working capital.
Option 2: common equity. This represents ownership Financing on the balance sheet, not a current asset or current liability used in the daily operating cycle, so it does not belong in the working capital calculation.
Option 3: accounts payable. This is a current liability reflecting obligations to suppliers, and it is included in the working capital framework because it affects the net current funding available for operations.
Option 4: inventory. Inventory is a current asset held for sale or production, and it contributes to the pool of resources considered part of working capital.
In summary, only common equity lies outside the realm of working capital components, whereas accounts receivable, accounts payable, and inventory are all integral to working capital calculations.

MSB-250-300-002 Topic 12 Quiz

Which of the following is NOT part of working capital?

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