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Which of the following accounts is part of working capital?

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

User Easuter
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1 Answer

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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
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