Which one of the following changes in working capital is least likely, given an increase in the overall level of sales?
A) An increase in inventories
B) An increase in accounts payable
C) A decrease in accounts receivable
D)An increase in notes payable

Question

Quizplus · Accepted Answer

An increase in overall sales would generally result in an increase in accounts receivable, as more customers would be purchasing on credit. Thus, a decrease in accounts receivable would be the least likely change that would occur. On the other hand, an increase in inventory levels and notes payable may be needed to support higher sales, while an increase in accounts payable may be used to help finance the purchase of additional inventory.

Which One of the Following Changes in Working Capital Is