alleryStart learning →A newspaper may show negative working capital without distress because
Ait holds very large stocks of paper
Bits long-term debt is fully repaid
Cadvance cash is booked as deferred revenue
Dit has no short-term creditors at all
Answer & Solution
Correct answer: C. advance cash is booked as deferred revenue
Subscription cash received early is a liability until delivery, which pulls working capital down without any distress.
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