Which one of the following is most apt to vary directly with sales?
A)current assets
B)long-term debt
C)shareholders' equity
D)paid-in capital
E)retained earnings

Question

Quizplus · Accepted Answer

Current assets are items that can be easily converted into cash within a year, such as inventory and accounts receivable. As sales increase, the need for these assets also increases to support the business operations, making it the most apt to vary directly with sales. Long-term debt, shareholders' equity, paid-in capital, and retained earnings are all more likely to be influenced by other factors such as financing decisions and company profits.

Which One of the Following Is Most Apt to Vary