Which of the following would raise a red flag about the cash cycle of a company?
A)Increase in both accounts receivable and accounts payable
B)Decrease in both accounts receivable and accounts payable
C)Increase in accounts receivable and decrease in accounts payable
D)Stable levels of accounts receivable and accounts payable.

Question

Quizplus · Accepted Answer

Increase in accounts receivable and accounts payable indicates that the company is taking longer to collect its receivables and pay its payables, which can lead to cash flow problems.

Which of the Following Would Raise a Red Flag About