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WAEC Financial Accounting 2017 Question 37

Question 37

Interpretation of Accounts

Working capital is the excess of

  1. A.current assets over fixed assets.
  2. B.current liabilities over current assets.
  3. C.fixed assets over current liabilities.
  4. D.current assets over current liabilities.
Show the answer and explanation

Answer: D (current assets over current liabilities.)

Explanation

Working capital = current assets - current liabilities.