๐Ÿ’ผ Pre-MBA Exam Prep

Working capital is calculated as:

A Total assets minus total liabilities
B Current assets minus current liabilities
C Revenue minus expenses
D Cash minus debt

โœ“ Correct Answer: Option B

Working capital = current assets - current liabilities. Measures short-term liquidity and operational efficiency. Positive working capital means the company can cover short-term obligations.

๐Ÿ’ก Why is B) the correct answer?

The correct answer to the question "Working capital is calculated as:" is Option B: Current assets minus current liabilities.

The other options โ€” A) Total assets minus total liabilities, C) Revenue minus expenses, D) Cash minus debt โ€” are incorrect for this Pre-MBA Exam Prep question. As explained above: Working capital = current assets - current liabilities. Measures short-term liquidity and operational efficiency. Positive working capital means the company can cover short-term obligations.

๐Ÿ“š About This Pre-MBA Exam Prep Practice Question

This 1-level Pre-MBA Exam Prep question from the Accounting topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free Pre-MBA Exam Prep practice test or use flashcards for spaced repetition review.

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