IB Interview Questions: Accounting : Part-4

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In continuation to : IB Interview Questions: Accounting

In continuation : IB Interview Questions: Accounting : Part -2

In continuation : IB Interview Questions: Accounting : Part-3

Working Capital and Capital Intensity

1. How do you calculate Net Working Capital?

Net Working Capital is calculated as Current Assets (excluding Cash) minus Current Liabilities.

2. What’s the difference between Accounts Receivable and Deferred Revenue?

If a company is paid before a sale is earned and substantially complete, we record Deferred Revenue. If a company is paid after a sale is earned and substantially complete, then we record Accounts Receivable.



3. What’s the difference between Prepaid Expenses and Accrued Liabilities?

If a company pays for an expense before it is incurred, we record Prepaid Expenses. If a company pays after an expense is incurred, then we record an Accrued Liability.

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