The magnitude of a company's accounts receivable obviously depends upon a number of factors, except _________.
A) the level and the pattern of sales
B) the breakdown between cash and credit sales
C) the difference between current assets and current liabilities
D) the nominal credit terms offered
E) the enforcement of credit terms

Question

Quizplus · Accepted Answer

The difference between current assets and current liabilities (working capital) does not directly affect the magnitude of a company's accounts receivable. Accounts receivable is influenced by sales levels, the mix of cash and credit sales, credit terms, and how those terms are enforced, rather than the broader financial structure of current assets versus current liabilities.

The Magnitude of a Company's Accounts Receivable Obviously Depends Upon