What term describes the surplus of current assets compared to current liabilities?

Multiple choice question for Accounting Mcqs. Select an option, then review the explanation below.

Explanation

The correct term for the difference between current assets and current liabilities is Working Capital. This represents the funds available for day-to-day operations. Circulating funds and operating capital are related concepts but not exact terms for this surplus. Permanent capital refers to long-term investment, not current assets.

Practice related questions from the same subject.

1.What is the accounting method called that systematically allocates the unexpired cost of fixed assets as expenses over multiple accounting periods?
2.What is the term used for any written document that serves as proof of a business transaction?
3.What term is used for the price reduction granted on faulty or damaged goods?
4.What is the term for the money invested by the owner to initiate a business?
5.What term is used to describe a decrease in the original price of an item?

What term describes the surplus of current assets compared to current liabilities?

Explanation

More Accounting Mcqs