As credit standards are tightened, sales are expected to__________ and the investment in accounts receivable is expected to__________.
A) increase; decrease
B) decrease; decrease
C) decrease; increase
D) increase; increase

Question

Quizplus · Accepted Answer

When credit standards are tightened, it becomes harder for customers to get approved for credit, which can result in a decrease in sales. Additionally, since customers may take longer to pay their debts, the investment in accounts receivable may also decrease.

As Credit Standards Are Tightened, Sales Are Expected To__________ and the Investment