Asked by Justice Johnson on Jul 15, 2024
Verified
Working capital increases when a company accrues sales revenue at year-end.
Working Capital
The difference between a company's current assets and current liabilities, indicating its short-term financial health and efficiency.
Sales Revenue
The income received by a company from its sales of goods or services before any expenses are deducted.
- Comprehend the accounting treatment and recognition criteria for revenues and expenses under the accrual basis.
Verified Answer
EA
Edward AdamsJul 21, 2024
Final Answer :
True
Explanation :
Accrued sales revenue is a form of accounts receivable, which is an asset on a company's balance sheet. When accounts receivable increases, it increases the company's working capital.
Learning Objectives
- Comprehend the accounting treatment and recognition criteria for revenues and expenses under the accrual basis.