Which of the following transactions will cause net working capital to decrease?

A) Inventory is purchased on credit.
B) The firm declares and pays a cash dividend.
C) An account payable is paid with cash.
D) Inventory is sold for cash.
E) None of the above would cause net working capital to decrease.

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating short-term financial health.

Cash Dividend

A payment made by a company out of its profits to its shareholders in the form of cash.

Account Payable

Liabilities of a company that represent its obligations to pay off a short-term debt to its creditors or suppliers.