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What is the difference between current assets and current liabilities?

Commerce
JAMB 2018

What is the difference between current assets and current liabilities?

  • A. Working capital
  • B. nominal capital
  • C. capital employed
  • D. issued capital
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Correct Answer: Option A
Explanation

The difference between current asset and current liability is known as working capital which represents operating liquidity available to business. Working capital is the capital of a business which is used in its day-to-day trading operations, calculated as the current assets - the current liabilities.

Working capital, also known as net working capital, is the difference between a company's current assets, like cash, accounts receivable (customers' unpaid bills) and inventories of raw materials and finished goods, and its current liabilities, like accounts payable.


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Post UTME Past Questions Agent
WAEC and NECO CBT App for Mobile Devices - Candidates, Schools, Centres, Resellers - 100% Offline -Download Now
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
WAEC and NECO CBT Software for Computers and Laptops - Candidates, Schools, Centres, Resellers - 100% Offline -Download Now
Your School's Whatsapp Group - Join Us now
Your School's Whatsapp Group - Join Us now
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
WAEC and NECO CBT App for Mobile Devices - Candidates, Schools, Centres, Resellers - 100% Offline -Download Now
Post UTME Past Questions Agent