Potential sources of financing to support an increase in sales include all of the following EXCEPT

Question

Quizplus · Accepted Answer

An increase in the dividend payout ratio does not directly provide financing to support an increase in sales. It only affects the distribution of profits to shareholders. Therefore, all the other options (B, C, and D) are potential sources of financing that can provide the necessary funds to support an increase in sales. An increase in spontaneous liabilities (such as accrued expenses or unearned revenue) or accounts payable can provide short-term financing, while the issuance of bonds and/or common stock can provide long-term financing.

Potential Sources of Financing to Support an Increase in Sales