Register now or log in to join your professional community.
<p><strong>a) increase net assets</strong></p> <p><strong>b) increase net current assets</strong></p> <p><strong>c) no effect on net current assets</strong></p> <p><strong>d) reduce net current assets</strong></p>
Practically we all know Net Current Assets = Current Assets - Current Liabilities, based on this formula, the correction will decrease the current liabilities and thus increase the net current assets, so the correct answer should be "B".
But, Realistically, some long time back I have already come across a similar question, and replied "net current assets" as a correct answer but it was incorrect, some others use different formula for computing Net Current Assets which is Current Assets minus Total Liabilities, if you agree with this, then the correction will increase your long term liabilities and decrease your current liabilities, but your Net Current Assets will remain unchanged, in this case the correct answer will be "C"
Answer is option # B
answer is b
B
b) increase net current assets, The Correct answer.
b
B. Increase in Net current assets due to change/decrease in current liability
