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O-LevelCommerceFinance7100/11 · Oct/Nov 2011 · Q401 Mark

A retailer buys new goods for resale and pays for them using an overdraft. What effect will this have on the retailer's working capital?

AThe working capital will be the same as before.
BThe working capital will be unknown until the goods are sold.
CThe working capital will decrease.
DThe working capital will increase.

✓ Correct answer

A: The working capital will be the same as before.

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About this question

Topic
Finance, O-Level Commerce (syllabus 7100). Multiple choice, 1 mark.
Source
O-Level Commerce, Oct/Nov 2011 Paper 1 Variant 1, question 40.

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