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Balance Sheet
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Entrepreneurship
ENT.085 Balance Sheet
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Two ventures both earned profit this month, but Venture A has current assets $800 and current liabilities $1,100. Which interpretation is most accurate?
A
Profit does not guarantee short-term liquidity; Venture A has negative working capital.
B
Negative working capital means total equity must be zero.
C
Current liabilities are not relevant to a balance sheet.
D
Profit means current assets must exceed current liabilities.
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