Which of the following rules stands true while preparation of Schedule of changes in working capital...........

General Accounting Principles Fund flow statement

Which of the following rules stands true while preparation of Schedule of changes in working capital?

A) An increase in current assets increases working capital.

B) An increase in current assets decreases working capital.

C) An increase in current liabilities decreases working capital.

D) An increase in current liabilities increases working capital

A and C

A and D

B and D

A, B, C and D

Rules for preparing the Schedules:

Increase in a current asset, result in increase (+) in “working capital”
Decrease in current asset, results in decrease (-) in “working capital”
Increase in a current liability, results in decrease (-) in “Working capital”
Decrease in a current liability, results in increase (+) in “Working capital”