The increase in accounts payables and accruals that occur with a sales increase is called:
A)spontaneously generated funds
B)additional funds needed
C)addition in retained earnings
D)financial capital needed

Question

Quizplus · Accepted Answer

The increase in accounts payables and accruals that occur with a sales increase are referred to as spontaneously generated funds. These funds are generated by the operation of the business and do not require any external financing. Choice B is incorrect as additional funds needed refers to the amount of funds needed to finance a specific project or investment. Choice C is incorrect as retained earnings are the profits that the business retains for its own use rather than paying dividends to the shareholders. Choice D is incorrect as financial capital needed refers to the amount of funds required to finance the operations of the business or a specific project.

The Increase in Accounts Payables and Accruals That Occur with a Sales