207k views
2 votes
Which of the following accounts is part of working capital?

1) Sales
2) Merchandise Inventory
3) Common Stock
4) Retained Earnings

User Easuter
by
7.7k points

1 Answer

4 votes

Final answer:

Merchandise Inventory is the account among the given options that is part of working capital, as it is a current asset that represents goods available for sale.

Step-by-step explanation:

The account that is part of working capital from the options given is Merchandise Inventory. Working capital is calculated as current assets minus current liabilities and is a measure of a company's short-term liquidity and operational efficiency. Merchandise Inventory is considered a current asset as it consists of the goods available for sale to customers in the ordinary course of business. Sales, although influencing working capital, is not an asset but a revenue account. Common Stock and Retained Earnings are part of shareholders' equity, not working capital.

User Alex Yu
by
8.6k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.