As credit standards are relaxed, sales are expected to___________ and the investment in accounts receivable is expected to ___________.
A) decrease; decrease
B) increase; increase
C) decrease; increase
D) increase; decrease

Question

Quizplus · Accepted Answer

As credit standards are relaxed, more customers will be approved for credit, which will lead to an increase in sales. Additionally, the investment in accounts receivable is expected to increase as more customers are granted credit and take longer to pay their bills.

As Credit Standards Are Relaxed, Sales Are Expected To___________ and the Investment