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Q85 BPP

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Q85 BPP

  • This topic has 1 reply, 2 voices, and was last updated 5 years ago by AvatarJohn Moffat.
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  • September 23, 2020 at 10:33 am #586452
    Avataralexandr1988
    Member
    • Topics: 5
    • Replies: 2
    • ☆

    Dear, here is the task

    Inventory = 2149
    AR = 3200
    Current Assets = 5394

    AP = 2865
    Overdraft = 1500
    Current Liab. = 4365

    In answers Net working capital is calculated as 5394 – 4365 = 984;
    but in my understanding we should to exclude the Overdraft and it should be 5394-2865 = 2529

    Am I wrong? or BPP has error?

    September 23, 2020 at 3:57 pm #586469
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54846
    • ☆☆☆☆☆

    The BPP answer is correct.

    Working capital is current assets less current liabilities, and an overdraft is a current liability.

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