As sales increase which of the following is a source of funds? a decrease in accounts...
As sales increase which of the following is a source of funds?
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a decrease in accounts payable |
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the portion of profit added to retained earnings |
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an increase in accounts receivable |
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a decrease in long-term debt |
Homework Answers
As sales increase which of the following is a source of funds?
Third option is correct: an increase in accounts receivable
Explanation:
Sales of goods and services result either cash sales or credit sales. Cash sales added in cash and bank account under current assets. Credit sales is added in account receivable under current assets.
Credit sales results in increase of accounts receivable.
Account receivable is account of debtors, who have purchased goods on credit basis. Due to this reason, as and when sales increase it result in increase of accounts receivable.
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